Thanks again. I don;t think I was too clear in my reply to your answer. I was wondering if it was possible to open a new ISA with £5640 and then transfer the money from the old ISA to one giving a better rate of interest and put in additional cash. But I guess that the answer is no. Many thanks for your help.

Eh! Now you have me confused!

I hope the following is going to answer your questions:

New money ISAs usually attract the best rates so your new money for this year should go into a new ISA. You have to decide whether you go Instant Access or not - not touching it for a year (or two?) will give you better interest rate. You can only put in £5640 but make a note of your maturity date as you will probably need to shift provider again as after the bonus period your 'headline rate' (given to attract you in) will usually drop.

Your 'old money' cannot be topped up (that would take you over your £5640 allowance for this year). You will need to find an ISA fund that will allow savers to 'transfer in'. These are usually lower interest rates, unfortunately, but remember it is tax free - unless you take it out that is.

Hope this has answered your questions

Just think - you get to do this all again next year but by then you will be an expert yourself.

Thanks camper that explains it perfectly. I knew there must be a solution but I couldn't find that info on any of the ISA websites that I looked at. If I open a new ISA and transfer the old to a new can I top up the 'new old' money or is the £5640 it for the year? Thanks for your help.

You can put your ISA amount of NEW money in each a d every year (this year it is £5640). You can move old ISA money (last year's year before's etc) to the highest rate ISA you can find but you must not cash it in or you lose your money's ISA status. You could split the old funds and have it in a 1 year and some in a 2 year etc if you wish. The rule is that once it is in an ISA you can move from
Provider to provider (no breaks) but once it taken out of its ISA protection - that's it, it can't go back and can now be taxed.
Don't forget you can also put £5640 into shares tax free.

I have the money to open a new cash ISA for the full amount in the current year. However, I also have approx £4K in an ISA that I opened a few yrs ago and which has an interest rate of 0.25%. I would like to move this to a current ISA with a different rate. What I don't understand is how I can do both in the same year. If I open a new ISA with the cash I have availble I will have used this year's allowance so does that prevent me from moving the 'old' money? And conversely if I move the 'old' money first does that prevent me from investing the 'new' money?

I read advice about moving money from ISAs where the 12 month bonus period has expired but don't understand how this can work: am I missing something here?