transfering ISA's

hells..bells_3

can you clarify an isa question, i have an isa with halifax , giving me 2.6% , i want to apply for santander's 3.3% isa , if i close the halifax one , transfering the money to my current account and then open the santander , will i lose out or be better off, because i dont understand this "transfer rule" ????? i dont want to lose my interest, if i've got this right , by doing it this way , i will lose a couple of days interest , but better as the isa's that allow to transfer from isa - to isa have worse interest rates

Lokolo

You won't lose interest but your thinking is slightly flawed.

https://forums.moneysavingexpert.com/discussion/3157772

Read the responses here.

hells..bells_3

i 've read all the blarb , and got myself all confused , can you tell me why my thinking is flawed )

Lokolo

Because you are wasting ISA allowance.

If you choose not to withdraw the money, but instead use new money then you are putting more and more in ISAs.

Year 1:
You have £5,100 in this ISA

Year 2:
You have £5,100 in the old ISA
You open a new ISA and deposit a new amount of £5,340.
You now have £10,440 in ISAs.

Your way:

Year 1:
You have £5,100 in ISA

Year 2:
You have £5,100 in old ISA
You close the old ISA and use that money to put in a new ISA.
You now have £5,340 in ISAs. You have to put any other savings in a taxable savings account.

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Obviously, as I said in the other thread, this will assume you are continuing to save and not just saving that amount and keeping it there for years.

Jake'sGran

You need to inform the ISA provider you want to switch to (and I would avoid SANTANDER) that you wish to transfer an ISA to them and they will send you a form to complete. They take care of the rest.

Under no circumstances must you withdraw the money yourself.

Santander have a really bad name on this forum for being inefficient.

hells..bells_3

thanks for that info , i only wish i did have over £10,000 to save in isa's , just looking to move the money around to get the best interest rate , and Jake's gran , i have had a bad bad experience with Santander with my mortgage (over the phone ) i might add , but may take the chance with the local branch this time , i'd get 3.5 % ))

hells..bells_3

it was bad , not bad bad , lol