Transfer Part S&S ISA to Cash ISA
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Tom99
Posts: 5,371 Forumite
[FONT=Verdana, sans-serif]Can you transfer cash which is part only of a S&S ISA into a cash ISA?
[/FONT] [FONT=Verdana, sans-serif]I hold shares, funds and individual corporate bonds in my S&S ISA and am thinking of selling the corporate bonds and investing in cash.
[/FONT] [FONT=Verdana, sans-serif]I bought the corporate bonds some years ago when the S&S ISA limit was much larger than the cash ISA limit, they all have maturity dates of 2020-2025 and my original idea was to hold them to maturity.
[/FONT] [FONT=Verdana, sans-serif]They have performed well to date and most are now worth more than I paid but if my calculations are correct the current Gross Redemption Yield is about 2% or less. Whilst I could continue to hold them to maturity my view is that if interest rates rise over the next few years bond prices will fall.
[/FONT] [FONT=Verdana, sans-serif]I have invested £20K into this ISA this year, although not in these bonds. Does that affect transferring part only?
[/FONT] [FONT=Verdana, sans-serif]Alternatively is there any fund or ETF which can be held in a S&S ISA but which mimics a cash investment, ie a small amount of interest but no risk of capital loss? That would save having to set up a transfer.
[/FONT] [FONT=Verdana, sans-serif]Is they a website or calculator which would help me check my own Gross Redemption Yield calculations for the bonds?
[/FONT] [FONT=Verdana, sans-serif]Thanks for your help.[/FONT]
[/FONT] [FONT=Verdana, sans-serif]I hold shares, funds and individual corporate bonds in my S&S ISA and am thinking of selling the corporate bonds and investing in cash.
[/FONT] [FONT=Verdana, sans-serif]I bought the corporate bonds some years ago when the S&S ISA limit was much larger than the cash ISA limit, they all have maturity dates of 2020-2025 and my original idea was to hold them to maturity.
[/FONT] [FONT=Verdana, sans-serif]They have performed well to date and most are now worth more than I paid but if my calculations are correct the current Gross Redemption Yield is about 2% or less. Whilst I could continue to hold them to maturity my view is that if interest rates rise over the next few years bond prices will fall.
[/FONT] [FONT=Verdana, sans-serif]I have invested £20K into this ISA this year, although not in these bonds. Does that affect transferring part only?
[/FONT] [FONT=Verdana, sans-serif]Alternatively is there any fund or ETF which can be held in a S&S ISA but which mimics a cash investment, ie a small amount of interest but no risk of capital loss? That would save having to set up a transfer.
[/FONT] [FONT=Verdana, sans-serif]Is they a website or calculator which would help me check my own Gross Redemption Yield calculations for the bonds?
[/FONT] [FONT=Verdana, sans-serif]Thanks for your help.[/FONT]
0
Comments
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Transfers do not count towards your contribution for the year so provided your S&S ISA provider accepts partial transfers out you should be ok. You should need to sell the bonds to cash and then tell your new cash ISA provider that you care doing a partial transfer and the amount you want moved (you might want to leave a bit of cash in the S&S ISA to pay normal account or trading fees etc).
ETFs are traded so there is always the possibility of capital loss regards of the asset value. There will be some low risk OEIC funds but they are likely to have some bonds in them.
Have you considered investing in a fund with short term bonds (or gilts) with 1-3 years left as the risk of capital loss is low but the return might be equivalent to the 1% in a cash ISA without the hassle of transfering out?
I assume you want to keep these ISA wrapped otherwise there are better cash savings accounts that might still be tax free if you used your personal allowance.
Alex0 -
Transfers do not count towards your contribution for the year so provided your S&S ISA provider accepts partial transfers out you should be ok. You should need to sell the bonds to cash and then tell your new cash ISA provider that you care doing a partial transfer and the amount you want moved (you might want to leave a bit of cash in the S&S ISA to pay normal account or trading fees etc).
ETFs are traded so there is always the possibility of capital loss regards of the asset value. There will be some low risk OEIC funds but they are likely to have some bonds in them.
Have you considered investing in a fund with short term bonds (or gilts) with 1-3 years left as the risk of capital loss is low but the return might be equivalent to the 1% in a cash ISA without the hassle of transfering out?
I assume you want to keep these ISA wrapped otherwise there are better cash savings accounts that might still be tax free if you used your personal allowance.
Alex
[FONT=Verdana, sans-serif]Yes I want to keep the amount in an ISA wrapper.[/FONT]
[FONT=Verdana, sans-serif]Is a fund investing in 1-3 yrs bonds ISA compliant? I know individual bonds have to be +5 yrs.[/FONT]
[FONT=Verdana, sans-serif]I am not sure that is what I would want, as I assume the fund would reinvest the redemption sums in further short term bonds.[/FONT]0 -
In short dated bond funds its not that the bonds were first issued with short dates but they are often old and now close to redemption so they have been unwound back to closer to their original value as there are not many coupon payments left. There is still the chance of making a small return for holding them and they shouldn't be too volatile if there is enough diversification.0
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