Can I pay into one ISA, open a new ISA and transfer into the new one each tax year?

spaceraiders

I've have about £15K in a Halifax ISA earning 5.5% AER. I've paid £3,600 into it this tax year.

I want to switch to the Icesave ISA for the better rate. Can I open a Icesave ISA this year and transfer in from my Halifax?

If I can, do I lose the interest (paid yearly) from the Halifax ISA?

10_66

As long as the new provider permits transfers in, you can transfer your existing ISAs. Check beforehand that there isn't a penalty for early withdrawal from the Halifax ISA. You need to arrange the transfer via the new provider, by completing a transfer form, which they will provide on request. Any interest earned on the old ISA will be added before it's transferred to the new provider.

spaceraiders

10_66 wrote: »

Any interest earned on the old ISA will be added before it's transferred to the new provider.

Are you really sure about this? It seems a bit too easy to switch with that feature.

10_66

If you're transferring all of the funds out of your existing ISA, rather than making a partial transfer (which would mean the account stays open), Halifax has to pay you any interest earned on the account before closing and transferring the funds. However, as I mentioned, you are best checking the terms and conditions of the particular ISA you have with Halifax to see what, if any, penalties there may be for withdrawing/transferring/closing.

spaceraiders

10_66 wrote: »

If you're transferring all of the funds out of your existing ISA, rather than making a partial transfer (which would mean the account stays open), Halifax has to pay you any interest earned on the account before closing and transferring the funds. However, as I mentioned, you are best checking the terms and conditions of the particular ISA you have with Halifax to see what, if any, penalties there may be for withdrawing/transferring/closing.

Cheers. I'm very sure there are no penalties on the Halifax account.