The Finances Economy

Because a cash ISA is tax free you’re limited to only one account for each tax year. You’re not limited to using the same provider during the year, but instead of opening a different ISA, you can only transfer one. But, there is a way that you can have multiple ISA’s, it just takes patience.

At the start of a new tax year on April 6, everyone that is over age 16 gets a new cash ISA yearly allowance. This means that no matter how many accounts you hold from the previous years, you’ll be able to open another one. ISA’s from previous years are perfectly legal as long as you keep them active and don’t withdraw the full balance.

While you can make withdrawals from any ISA, if you withdraw the full amount the account will become inactive and can no longer be used. Your cash ISA’s that are carried over from previous years can even be held with different providers. And, as long as you keep some money in each account, it will be tax free indefinitely.

If you don’t have the money to open a new ISA account at the beginning of the tax year, you might want to consider making a small withdrawal from an existing account to open one. Just try to make sure that you choose an account that offers ISA rates comparable to the one you currently have.

Tags: ISA Rates