ISA Renewal

Last year I took out an NS&I ISA, which has one of the best interest rates, at 5.80%.

In case you don't know about ISAs, they are basically untaxed UK savings accounts. With a Mini Cash ISA you can deposit up to £3,000 per tax year.

In the run up to the new financial year I was expecting some kind of letter describing what would happen with regards to renewing the ISA or about how to start using another provider's product. However, I have received no information and cannot find it on the website.

Though I've submitted a query, maybe one of you know how this works - if so, please tell me. If I pay into my NS&I account will my ISA provider for this year automatically become NS&I? If I would like to use another provider for this year do I need to inform NS&I first or simply apply elsewhere?

Comments

[saffronsaris]

That's almost 6%!
I don't even get interest rates anywhere near that with fixed time deposits. Most financial planners even claimed ROI of 5% is considered good for investments.
Almost 6%! and UNTAXED!.....

[Darren]

Yes, it's good isn't it? There is the £3000 limit per year, however.

I think the reasoning behind ISAs is that the UK government wants to encourage people to save. Works for me!

[Lee]

From what I've heard you're allowed to open 1 new ISA each tax year. Any previous year's money can be divided amongst different ISAs as they count as transferrals rather than new deposits. Or so say the people in MSE forums.

If this is the case then if you put money in say, ING's ISA with their flashy 6% AER, they will be this year's provider which you can then transfer out next tax year when the special rate expires. The problem is not all ISAs allow you to 'transfer in' (eg NS&I).

[Darren]

Thanks for the information Lee. I wasn't aware that you could slit out a previous year's savings like that.

It's really annoying how most of these high interest ISAs don't allow you to transfer other ISA savings into them.

Today I finally got a statement from my provider and the information I was looking for. As everyone has rightly told me you can just pay into the same account if you want to continue your ISA with the same provider for this tax year.