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Where to put £1000

(10 Posts)
lottie63 Wed 13-Mar-13 12:15:47

Think I ve got it. Thanks Cogito

CogitoErgoSometimes Wed 13-Mar-13 11:47:24

Your second post is right. You can have one Cash ISA in each financial year. The maximum deposit is £5640 for this year and £5760 for the year starting April 5th 2013. You can either start a new ISA each April or deposit up to the maximum amount into an existing one and roll it over. If you start a new ISA, some institutions allow you to transfer your old ISA balance into the new one under what they call the 'ISA wrapper' and retain the tax-free status. This prevents having lots of ISAs all over the place.

A note on withdrawals. If you invest £5640 in an ISA and then withdraw £1000 you can't deposit any more money in the same tax year because that would take you over your total maximum deposit. Does that make sense?

The interest is not taxable. Savings account interest is taxed before you get it (at source) but Cash ISA interest is not and doesn't have to be declaired

lottie63 Wed 13-Mar-13 11:07:15

Oh... I ve got that wrong havent I? I m just reading online now that 'you can only invest in ONE cash ISA in each tax year and I m almost certain I've paid something, tho not much, in the current one this year

lottie63 Wed 13-Mar-13 11:04:32

Cogito, so have I got this right?

Say that I have one already (assuming I haven t paid in the maximum sum for this year), I could either:

a) put the £1000 in there, or

b) open an additional new one with the £1000, thus having two ( but making sure the two combined don't go over the max sum)

If I have reached the max sum with ISA 1, I could open another after 5 April?

So, the maximum deposit only applies for each year? That is, if I so wished, I could put in the maximum amount of money EVERY year, so in five years, say, I could have 5 different ISAs 'filled up'? So, over £27k savings?

Would I have to declare all this on a tax return? Is it taxable?

Sorry to be so stupid about all this

CogitoErgoSometimes Wed 13-Mar-13 10:24:48

You can have one per financial year. If you have one already you can add your £1000 provided you haven't deposited the maximum already (£5640) and, if you wait until April 5th, you can start a new one.

lottie63 Wed 13-Mar-13 09:59:48

Can I only have one cash ISA? I m sure I've got one lurking about somewhere

CogitoErgoSometimes Wed 13-Mar-13 06:53:47

I'd put it in a Cash ISA. The interest may not be stellar but it's tax-free and no risk. If you don't need the money for a while you could make it a fixed term Cash ISA which offer slightly better rates. But if you need instant access, that may not apply. Don't buy premium bonds... they are crap. smile

LovesBeingWokenEveryNight Wed 13-Mar-13 04:43:13

Re the bonds Martin Lewis has a fan little gizmo that works out your odds on prizes based on the amount you want to invest. Iirc he says it's not the same level of return as interest (might be by now I guess with interest rates) and should be treated more as a bit of fun if you get a prize.

IsThatTrue Wed 13-Mar-13 04:39:45

Premium bonds still exist search ns&i online. Each bond enters you into a prize draw each month. DH used to earn more from that than he would from interest, but he had 10k in there. It took 3-4 days for me to withdraw mine recently.

Or have you looked at ISAs? Obviously it depends on wether you are still saving/want to use your allowance for other savings. I've got a Halifax online ISA ATM that is on a rate of 3% APR. my normal online savings is only 1.5% so anything I won't be withdrawing until next tax year is being shoved in the ISA.

lottie63 Wed 13-Mar-13 04:10:49

Where would you put £1000? Savings a/c or Premium Bonds? Do bonds still exist any more? Need relatively quick access as it's rainy day/emergency money (ie around 1 week's withdrawal notification maximum)

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