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General Chat Thread, ISAs in General; Quick question, When it comes to an ISA for savings do I arrange the new account for next year before ...
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    CAM
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    ISAs

    Quick question,

    When it comes to an ISA for savings do I arrange the new account for next year before the 5th April or after? Mine will drop to a pathetic interest rate but I want to re-negotiate it to a higher rate or transfer elsewhere if I can't.

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    zag
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    Open it as soon as possible, doesn't matter which year.

    It rolls over to the next anyway and you get a new allowance in tax free savings.

    - - - Updated - - -

    Open it as soon as possible, doesn't matter which year.

    It rolls over to the next anyway and you get a new allowance in tax free savings.

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    CAM (24th March 2014)

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    You can open, or move as many isa accounts as you want in a year. The limiting factor is the amount of money you are allowed to pay in. Shouldn't make too much difference when you transfter to a new isa but you might be better to wait for the new financial year as you may have clauses or penalties attached.

    - - - Updated - - -

    You can open, or move as many isa accounts as you want in a year. The limiting factor is the amount of money you are allowed to pay in. Shouldn't make too much difference when you transfter to a new isa but you might be better to wait for the new financial year as you may have clauses or penalties attached.

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    CAM (25th March 2014)

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    Come July 1st 2014 NISAs will be introduced and you can save up to £15K per financial year. You'll be able to transfer existing ISAs into NISAs, but it's still unknown whether or not the interest rate will be comparable or noticeably lower.

    It may still be better to put money away into a fixed rate ISA (2 or 3 years) or of course a bond. Price comparison websites will give you the latest most up-to-date info

    - - - Updated - - -

    Come July 1st 2014 NISAs will be introduced and you can save up to £15K per financial year. You'll be able to transfer existing ISAs into NISAs, but it's still unknown whether or not the interest rate will be comparable or noticeably lower.

    It may still be better to put money away into a fixed rate ISA (2 or 3 years) or of course a bond. Price comparison websites will give you the latest most up-to-date info

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    CAM (25th March 2014)

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    m25man's Avatar
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    I switched to a Stocks and Shares ISA managed it myself and got 47.8% last year ;D

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    CAM (25th March 2014)

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    You will get more interest on this current account - New TSB Plus current account pays 5pc interest - Telegraph

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    CAM (25th March 2014)

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    CAM
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    Hmm will have a chat with the bank this weekend then. I just need something I can punt leftover cash from my balance to the ISA each month.

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    remember that with an ISA you can remove the money but it really does defeat the object of the exercise. An ISA won't make you lots of dosh in the short term but the tax savings are very worth accumulating over the years and an ISA can grow into a very useful and flexible nest egg.

    - - - Updated - - -

    remember that with an ISA you can remove the money but it really does defeat the object of the exercise. An ISA won't make you lots of dosh in the short term but the tax savings are very worth accumulating over the years and an ISA can grow into a very useful and flexible nest egg.

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    zag
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    Quote Originally Posted by FN-GM View Post
    You will get more interest on this current account - New TSB Plus current account pays 5pc interest - Telegraph
    That's great but don't forget you get 15k tax free interest for life on the ISA. Its not just the first year you get the savings, its every year after that. Those tax free savings can grow to a huge amount over the years. On the TSB plus account you would be taxed every year at 20-40% on the interest.

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    Quote Originally Posted by zag View Post
    That's great but don't forget you get 15k tax free interest for life on the ISA. Its not just the first year you get the savings, its every year after that. Those tax free savings can grow to a huge amount over the years. On the TSB plus account you would be taxed every year at 20-40% on the interest.
    You will still gain more than you would in an ISA. ISA's are not that good, in recent years i have had my money in fixed term accounts in Australia and got a good return on them.

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    zag
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    Quote Originally Posted by FN-GM View Post
    You will still gain more than you would in an ISA. ISA's are not that good, in recent years i have had my money in fixed term accounts in Australia and got a good return on them.
    The real advantage of an ISA is compound interest over the years tax free. Imagine after 10 years you would have £150,000 and assuming an interest rate of 5% (which is the long term traditional norm) the tax free interest would be huge. Then add on the fact that you get interest on the interest over those 10 years (with no tax) and it starts getting even better. You would actually have nearly £200,000. Compound interest is a wonderful thing

    Code:
    Year	Year Deposits	Year Interest	Total Deposits	Total Interest	Balance
    1	£ 15,000.00	£ 412.52	£ 15,000.00	£ 412.52	£ 15,412.52
    2	£ 15,000.00	£ 1,201.06	£ 30,000.00	£ 1,613.58	£ 31,613.58
    3	£ 15,000.00	£ 2,029.93	£ 45,000.00	£ 3,643.51	£ 48,643.51
    4	£ 15,000.00	£ 2,901.22	£ 60,000.00	£ 6,544.73	£ 66,544.73
    5	£ 15,000.00	£ 3,817.08	£ 75,000.00	£ 10,361.80	£ 85,361.80
    6	£ 15,000.00	£ 4,779.79	£ 90,000.00	£ 15,141.60	£ 105,141.60
    7	£ 15,000.00	£ 5,791.77	£ 105,000.00	£ 20,933.36	£ 125,933.36
    8	£ 15,000.00	£ 6,855.51	£ 120,000.00	£ 27,788.87	£ 147,788.87
    9	£ 15,000.00	£ 7,973.68	£ 135,000.00	£ 35,762.55	£ 170,762.55
    10	£ 15,000.00	£ 9,149.06	£ 150,000.00	£ 44,911.61	£ 194,911.61
    As you can see, in year 10 you are getting nearly 10k in interest A YEAR!! Imagine how upset you would be if that was getting taxed at 40%!

    ISA's theoretically prevent double taxation and everyone should take advantage of them
    Last edited by zag; 26th March 2014 at 09:05 AM.

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    nephilim's Avatar
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    question is, who can realistically put in the £15k a year? I can scrap around £8000 and that's going frugal on everything!

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    zag
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    Quote Originally Posted by nephilim View Post
    question is, who can realistically put in the £15k a year? I can scrap around £8000 and that's going frugal on everything!
    Not many people... but the same thing applies if you put in £1,500 a year. You just get less tax free interest.

    You would still be recieving over £100 a month tax free though at the end.
    Last edited by zag; 26th March 2014 at 10:17 AM.

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