❓ Ask Anna: On what date can I open a cash ISA for the new tax year 2019/20? I’ve been told 8th April!

Author: Anna Bowes
08th March 2019

Normally you would assume that you can open a new cash ISA from the 6th April, as that is the first day of the new tax year. However, different banks have different rules.

Neon open sign

This year the 6th April falls on a Saturday and perhaps the provider you were talking with is not open on Saturdays, so the first opportunity would be the following Monday – the 8th.

However, many cash ISAs can be opened online, which means that they should be available from 6th April. Also, many banks and building societies are open on a Saturday so if you’d prefer to go into a branch, hopefully your local provider can help.

It’s great that you are already planning to open a cash ISA as soon as possible. This makes a lot of sense if you would otherwise be paying tax on the interest.

For those who wait until the end of the tax year but don’t want to lose their allowance, it should be remembered that once again providers will have different deadlines when it comes to opening and subscribing to a cash ISA this tax year.

As a result, if you wait until 5th April, you could find your choice very limited or indeed could miss out altogether.

So, if you are planning to use your cash ISA allowance for the current tax year, perhaps get a move on and get it sorted out sooner rather than later.

Remember, it’s not just about the date you open the account – you also need to deposit the funds before the end of the tax year.

Our reader goes on to also ask:

"When opening a new fixed rate cash ISA and the provider requires a minimum deposit, would transferring in an old ISA fulfil this requirement or do I have to deposit ‘new cash’?"

The quick answer is no. You DON’T have to deposit new cash into a cash ISA that you are transferring an old ISA to, if the value of the old ISA is greater than the new ISA minimum.

In fact, if you did add new cash, that would mean that you would need to use this account as your cash ISA for the current tax year – not just for transferring the old one into. Amalgamating your cash ISAs might be a good idea if you are choosing the best rates – but there may be reasons that you would prefer to keep your old and new ISAs separate.

Perhaps you might want penalty-free access to the new ISA or the overall balance might be greater than the Financial Services Compensation Scheme. Either way, it’s your choice.

If you have any savings questions, not just about cash ISAs, please don’t hesitate to email us at [email protected].

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