Connections 321 - Sat 27 April
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What to do with Old Cash ISA Accounts?
8 Answers
I am about to transfer two old cash ISA's which are giving terrible returns to one new higher rate one.
Is there any rule or advice on what to do with the old accounts? Should I transfer the lot and close the old accounts or is it wiser to keep a little in each of the old accounts and keep them open? Does it make any difference?
Someone once advised that if you transferred debts from old credit cards to new 0% Credit Cards that it was best to close the old ones down. Is this correct and does anything similar relate to ISA accounts?
Is there any rule or advice on what to do with the old accounts? Should I transfer the lot and close the old accounts or is it wiser to keep a little in each of the old accounts and keep them open? Does it make any difference?
Someone once advised that if you transferred debts from old credit cards to new 0% Credit Cards that it was best to close the old ones down. Is this correct and does anything similar relate to ISA accounts?
Answers
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I regularly change my ISAs. I find a better rate one and transfer everything over, thus closing the otherone. Make sure you do it by transfer via the new account as you will lose out if you close it yourself. Some accounts don`t take transfers from other accounts (usually ones with a slightly better interest rate) so you need to check that as well
Two questions here;
Firstly, I have opened up a new fixed term ISA at a better rate and kept the old one open because the old one is instant access and it's useful to be able to get at the cash if you need it.
Secondly, I move money about on my credit cards all the time to take advantage of 0% offers. You will find that if you have only a little balance on the old card, you will get offers on them too. I've never closed down a card if I've moved a balance off, I just move balances back to it when the time is right. If you keep paying off as well as switching, it's quite effective, but you have to stay on the ball with end dates for the special offers, they don't often point out when they are coming to an end!
Firstly, I have opened up a new fixed term ISA at a better rate and kept the old one open because the old one is instant access and it's useful to be able to get at the cash if you need it.
Secondly, I move money about on my credit cards all the time to take advantage of 0% offers. You will find that if you have only a little balance on the old card, you will get offers on them too. I've never closed down a card if I've moved a balance off, I just move balances back to it when the time is right. If you keep paying off as well as switching, it's quite effective, but you have to stay on the ball with end dates for the special offers, they don't often point out when they are coming to an end!
Goodness! That was quick, thanks you two!
237SJ - yes I have picked an account that accepts transfers and have done my homework re: transferring, NOT withdrawing but nobody ever seems to tell you what's best to do with your old account. Keeping them all open can get a bit messy, I guess.
Boxtops - I'm pretty sure my new ISA has instant access (I've picked one with A & L where I have my current bank account). You have to be very disciplined to juggle too many accounts - I tend to forget about them (until I received this years Statement and nearly had a heart attack at how little interest I'd earned last year).
Re: credit cards, I'm sure I heard somewhere that if you had too many C/Cards opened it made it look like you too much (can't remember the term used) which isn't good for your Credit rating. I always thought that most offers on cards were for new customers, not old.
You sound very disciplined and on the ball boxtops!!
237SJ - yes I have picked an account that accepts transfers and have done my homework re: transferring, NOT withdrawing but nobody ever seems to tell you what's best to do with your old account. Keeping them all open can get a bit messy, I guess.
Boxtops - I'm pretty sure my new ISA has instant access (I've picked one with A & L where I have my current bank account). You have to be very disciplined to juggle too many accounts - I tend to forget about them (until I received this years Statement and nearly had a heart attack at how little interest I'd earned last year).
Re: credit cards, I'm sure I heard somewhere that if you had too many C/Cards opened it made it look like you too much (can't remember the term used) which isn't good for your Credit rating. I always thought that most offers on cards were for new customers, not old.
You sound very disciplined and on the ball boxtops!!
Well I do check my credit rating from time to time CB, and having a clutch of cards which I pay regularly hasn't been a problem - yes, I am quite eagled-eyed with it! I think it's bad for your rating if you have loads and they are all charged to the maximum, that gives you nothing to play with. It's amazing how you get offers sent through... 0% til next February is currently good! - and if you ring and enquire, they often find a rate they've forgotten to tell you about for balance transfers.
There's no point in keeping the old ISAs open except the chance that they will in future have good rates again. If that happens there will be less bureaucracy to go through (ID checks) to transfer the money back again if they are still open than if you have closed them.
Personally I'd close them and face that obstacle if it ever happens.
Personally I'd close them and face that obstacle if it ever happens.
Whatever you do, don't close the ISA accounts as that will cause them to lose their tax-free status. It would make sense for you to transfer them all to better paying accounts, either separately to other providers or amalgamate them all with one new provider. You can check out the best rates on the savings section of www.moneysavingexpert.com If you do decide to transfer, you will need to get your existing ISA provider to handle the administration to ensure you keep their tax free status. You will get a better interest rate if you can afford to tie up your money for longer periods of time. Some ISA providers like Kent Reliance, will allow you to tie your money up for long periods but allow you to withdraw some of it provided you give them 100 days notice. Check the terms and conditions carefully before you transfer as each provider has different options.
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