ISA Transfers

AMG1

Hello,
I was just wondering....I want to open a new ISA at the highest rate. These are usually ISA's where you cannot transfer from old ISA's. Can I still withdraw/transfer the money from an old ISA into a savings account/usual account and then transfer the same amount into a new ISA from the savings/usual account to get the highest rate?

Lokolo

Yes you can do this but it's only worthwhile doing this if you aren't planning on saving more.

For example:

You have £5,100 in an ISA already.
You plan on saving £100 a month.

If you do it your way and withdraw £5,100 and then deposit again you will then have a maximum of £5,340 in ISA, plus £1,000 in other savings.
If you leave the money in your ISA, but open a new one to deposit new money in. You will have £5,100 in old ISA + £1,200 in new ISA meaning you will have £6,300 in ISAs.

CLAPTON

well of course you can withdraw your money from an ISA and yes you can use the money for whatever you like

however if you can afford to pay new money into a new ISA its best to keep the old ISA as you benefit from the tax free status of both amounts of money
so e.g. if you had 5,100 in a 2010-11 ISA and can afford new money (up to 5,340) to put into an 2011-12 ISA then you would benefit from all the money being tax free (10,440)

of course if the 2010-11 isa had dropped to a low AER then it would be worthwhile transferring it to a better paying ISA