There was a flurry of activity in the ISA market, just before the 2011/12 tax year ended recently. The good news is that many of the better offers are still available in the new tax year.
If you want an ISA, there are two ways to go about it. You can either switch from an existing ISA to any ISA provider, as long as the product accepts transfers in (check first). Or you can open a new one using the new tax year’s allowance, available from tomorrow. The good news is that the new total ISA allowance for 2012/13 has increased to £11,280. Up to £5,640 can be invested into a cash ISA, with the remainder into a stocks and shares ISA.
Switching from one ISA to another is easy if you follow the golden rule - never, ever, ever close an account down! If you do, you lose all your built-up tax free loveliness and you can’t get it back.
So if you want to switch, talk to your new preferred ISA provider about how to move money over to them. You’ll need to fill in a form, they ask for the money from your existing provider - and bingo, your previous savings have a new home.
See our current best buys to find which ones accept transfers in and which accounts are only for new Cash ISA subscriptions.
To open a brand new Cash ISA, you can generally do this in a branch, by telephone and post, or online. Branch is quickest, as long as you are front of the queue and have filled your application form in correctly of course. At the counter, you should be able to pay in cash or cheques although make sure you’ve got some ID to verify who you are and where you live. Some banks will let you transfer money in from other accounts you hold with them.
Postal and online applications are a bit trickier. It isn’t a good idea to send cash in the post at the best of times - and most banks and building societies won’t accept the money if you did. And of course, you can’t squash money into the internet via your PC (although small children often try hard by pushing pennies into USB slots, DVD drives and other gaps).
The other options are electronic transfer or a cheque. You can apply online for many of the best buy accounts. But you’ll generally need to send a cheque.
Many providers allow you to whizz money into a new ISA using the Faster Payments system. This can take minutes or a few hours - tops - to send money from one current or savings account to your shiny new ISA. Check providers' websites to see if it can be done.
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