I've used my ISA allowance for this year. I have two ISAs, each with a different company. One of the ISAs pays a lower rate of interest than I would like.
Am I allowed to transfer the low-rate ISA into a higher-rate ISA with the same company?
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Yes, presuming that the company allows it.
Some high rate cash ISAs are for "new money" only rather than transfers - the rate is a bribe for you business.
The money must be transferred, not withdrawn and re-deposited as this loses the tax-free status.
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As far as I know you should be able to transfer into a non fixed-rate ISA, but you may find that there is a limited time scale for transferring into an existing fixed-rate one.
I'm no expert, though.
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Minefield! I checked my bank's ISAs. One allowed transfers in at any time, with the other the transfer had to be applied for within 14 days of opening. Check the small print closely!
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I've just been informed on the telephone that I can't transfer my low-rate ISA into one of that company's higher rate ISAs because I've used up my allowance for this year. I can transfer it next year but this will use up (some of) next year's allowance. If I did this it would effectively mean that next year I couldn't invest new money into an ISA, and I don't want that to happen. At the moment I can't see how I can escape from this situation. I want to be able to get a higher rate of interest than the low-rate ISA is currently paying without jeopardising my next year's ISA allowance. Any suggestions?
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Find another ISA supplier that understands the rules?
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>> Find another ISA supplier that understands the rules?
He can't this year - he's already opened an ISA.
Some of the ISAs paying higher interest tend to include a bonus payment and don't allow you to transfer other ISAs. The banks seem to be making it difficult to move money between ISAs to get a decent interest rate.
I've opened a few recently - one in for 4 years and other 18 months. So when they are at the end of the higher rate period I will have a similar problem.
If the ISA was paying really badly then it would be tempting to put it into an account where interest is paid. Some ISAs revert to 0.1% interest rates! But then you'll not be able to transfer it into another ISA easily because the cash limit is £5640.
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>> moment I can't see how I can escape from this situation. I want to be
>> able to get a higher rate of interest than the low-rate ISA is currently paying
>> without jeopardising my next year's ISA allowance. Any suggestions?
>>
You asked a similar question in April.
www.moneysavingexpert.com/savings/cash-isa-transfers
p.s. care to name the company/bank that is giving you this runaround?
Last edited by: John H on Wed 27 Jun 12 at 13:20
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>>He can't this year - he's already opened an ISA.
But he only wants to transfer an existing ISA that he is not happy with.
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Yes but where is he going to transfer it - the one he opened this year won't accept transfers. A lot of the higher interest rate ones don't.
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My main bank reduced the ISA rates drastically, I moved it all to Halifax @ 4.25% fixed for 3 years.
I now see the original ISA Bank are offering higher rates - obviously many, like myself, walked and now they need to money!
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"...where is he going to transfer it..."
Anywhere with a decent rate that will accept it - it's not a new ISA.
Or have I missed something?
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But you cannot open another ISA can you even if it's transferring existing ones? Does that not count as opening an ISA?
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I move my ISAs (cash ones) around from time to time. At no point has it ever been suggested that I am taking out new ones when I transfer them, even though I am technically opening a new account. What you must NOT do is withdraw the cash and then attempt to open another ISA with it - it loses its tax-free status. As long as you avoid that, the ISA remains an "old" ISA and you can move it ad libitum.
Last edited by: FocalPoint on Wed 27 Jun 12 at 15:14
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>> But you cannot open another ISA
True, you cannot open more than one ISA each tax year.
>> can you even if it's transferring existing ones? Does
>> that not count as opening an ISA?
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He is not opening a new ISA, merely transferring it. As multi-millionaire Martin Lewis says, fill out a transfer form, do NOT withdraw the money.
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I assume the foregoing posts refer to cash ISAs, which I have never used. I do know however that transferring stocks and shares ISAs to new providers is most likely to mean existing providers insisting on selling the holdings and transferring the cash. Fees are involved and of course prices will have changed between original value and the new cash value. The new provider will probably not charge more than the usual commission but it might still be very costly overall.
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>>Does that not count as opening an ISA?
As far as I am aware, it does not.
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Thanks for the replies - it's helped me. I thought when I need to take the money from one of my ISAs after the initial 18 months and put it in another new ISA (because the interest rate has a bonus) that opening the other ISA means I cannot put another £5640 in another cash ISA next year.
But thinking about it, it's not opening ISAs that's the problem it's paying in money isn't it. So you could open a new cash ISA somewhere this year and transfer other ISAs to it. And also open up a new ISA with a good introductory/bonus rate and stick in an extra £5640.
I bet there aren't very good rates on cash ISAs that accept transferred ISAs.
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"I bet there aren't very good rates on cash ISAs that accept transferred ISAs."
You might be surprised.
Check tinyurl.com/73oo2fj
Santander, 1-yr fixed, 3.35%, min £2,500, transfers allowed.
Or Santander, 2-yr fixed, 4.00%, min £1, transfers allowed.
Not brilliant, but, considering the bank rate, not bad.
Last edited by: FocalPoint on Wed 27 Jun 12 at 17:32
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>> Not brilliant, but, considering the bank rate, not bad
Even better as it seems the next move base rates make may be to drop a tad lower.
**EDIT** - /awaits Zero to advise why he'd want more than 4pc fixed to put money with Santander....
Last edited by: Lygonos on Wed 27 Jun 12 at 18:11
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>> **EDIT** - /awaits Zero to advise why he'd want more than 4pc fixed to put
>> money with Santander....
Oh sorry! I thought that was their customer satisfaction rating.
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I inadvertently fell foul of the 'opening more than one ISA' rule.
I'm still here, so I don't think there's much checking.
Hang on while I answer the door........................
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ISA rules question - Lygonos
