Whats the point of keeping the money in the isa accounts as soon as the "bonus" period finishes?
For instance, my barclays isa had 3.5% fixed for this tax year, but as soon as it ends (i.e. next month), i hear it will drop to a measly 0.1%. Meanwhile, Santander has a new isa coming, which promotes 3.5% for 2010/2011 tax year. What i was thinking of doing is withdrawing and depositing the money from the barclays isa to the Santander isa.
When i presented this idea to the Santander finance person, she told me not to do that as I would lose my "tax benefits". Huh, I thought the only benefit was that the interest was tax free? I understand that the new isa does not allow isa transfers (in other words, transfer without losing your tax year deposit allowance), but it doesnt say that I cannot withdraw and deposit. The only disadvantage is that I would quickly shrink my deposit allowance (but id rather lose that than allow my money to earn 0.1%)
Upon research, I see that some isa accounts that do allow transfers actually have a minimum requirement of £9000 of money to get a decent % return (or some other figure).
Hmm, so maybe i should withdraw only a bit and deposit till i get about 9000 in total?