ISA question

[d000hg]

I've just converted my existing Santander ISA to a 2yr fixed deal on 2.3%. However for new money, Coventry offer 2.75%.

As long as I make sure not to contribute to both in the same tax year, there's nothing to stop me having both, is there?

 

[mudskipper]

I've just converted my existing Santander ISA to a 2yr fixed deal on 2.3%. However for new money, Coventry offer 2.75%.

As long as I make sure not to contribute to both in the same tax year, there's nothing to stop me having both, is there?

That sounds right - you can open a new one for each year.

Hoping there will be some better deals along in July when the new ISA comes into effect, so avoiding fixed rate for now.

 

[Waldorf]

Why do you have a cash ISA? Any serious contractor will be building up an investment portfolio, cash is just a wasting asset, even if enhanced by an ISA wrapper.

However, as a previous poster has said, from July the limit will be £15,000 for both cash or investments and they can be swopped between each type, but wait until July before fixing your cash.

 

[d000hg]

Why do you have a cash ISA? Any serious contractor will be building up an investment portfolio, cash is just a wasting asset, even if enhanced by an ISA wrapper.

Any serious investor (whether you're a contractor is totally irrelevant) seeks a diverse investment portfolio including cash.

MS: yeah the new rules are interesting. My Santander fixed ISA says all 2014/15 contributions must be paid in by the end of May so I've no idea what they're going to do about the changes in July... if subscribers will find they cannot invest the remaining ~£9k in a cash ISA 2014/15. But many of the top deals work like this so it seems the best option is not to rush in and contribute to a 2014/15 ISA until the providers update in July?

 

[TheFaQQer]

Why do you have a cash ISA?

1) Diversification of portfolio

2) Decent interest rate for instant access accounts (albeit not if you put it in an ISA which has a notice period or fixed for a while)

 

[AtW]

Why do you have a cash ISA?

Tax free - even if now rates are low, later they will come back up but the allowance will be lost if not used now.

 

[jmo21]

Coventry offer 2.75%.

As long as I make sure not to contribute to both in the same tax year, there's nothing to stop me having both, is there?

It's a 3.5 year fixed rate just in case you hadn't spotted that!

 

[TheFaQQer]

It's a 3.5 year fixed rate just in case you hadn't spotted that!

If the rates change, then the penalty for ditching isn't that high - there is a discussion on MSE about it which gives the effective interest rates depending on when you give notice.

1 year = 1.85%
2 years = 2.3%
3 years = 2.75%

 

[d000hg]

WTFS

Only one year's worth of ISA will go in and get locked away and if you MUST access it you can.

 

[jmo21]

I know, just pointing it out