Cash ISAs: The Best Currently Available List

hjghg5

I'll have to leave mine as is, I think. I was planning on withdrawing a decent chunk from my existing Coventry ISA tomorrow to pay off my mortgage at the end of my fixed rate, then topping it back up over the course of the rest of the tax year from salary/maturing bonds. I don't think I've got enough time to transfer to the new rate before I withdraw, and then can't move until I've put the money back in.

andyhicks88

Hi can anyone tell me the 1 or 2yr fixed rate ISA's available right now that allow further additions during the term?  I know most only have a small window to make additions but I'm after the ones that allow additions throughout the term. Is it just Shawbrook?

andyhicks88

Also whilst I'm here I will ask about this, I currently have a 2 year Barclays Fixed ISA at 4.1%, which is flexible, obviously there are way better rates now so I'm wanting to move but there is the 180 day penalty to transfer. Would I be correct in thinking that it would be wise then to take advantage of the fact you make 3 penalty free withdrawals of 10% of the current balance before i transfer so that the balance is lower therefor the 180day charge will be lower? I can then just add what I have withdrawn back into the new ISA?   Is that correct or am I missing something?   Btw I only have about £2000 taken up of this years allowance, the full 20k from last year.

pecunianonolet

hjghg5 said:

I'll have to leave mine as is, I think. I was planning on withdrawing a decent chunk from my existing Coventry ISA tomorrow to pay off my mortgage at the end of my fixed rate, then topping it back up over the course of the rest of the tax year from salary/maturing bonds. I don't think I've got enough time to transfer to the new rate before I withdraw, and then can't move until I've put the money back in.

An internal transfer and close to the new issue should be rather instant or next working day. I had to wait like 2 minutes to get through to a very friendly adviser on the phone so worth to give them a call and maybe you can get the funds transferred to the new ISA, withdraw tomorrow and you have the new rate and can pay back.

pecunianonolet

andyhicks88 said:

Also whilst I'm here I will ask about this, I currently have a 2 year Barclays Fixed ISA at 4.1%, which is flexible, obviously there are way better rates now so I'm wanting to move but there is the 180 day penalty to transfer. Would I be correct in thinking that it would be wise then to take advantage of the fact you make 3 penalty free withdrawals of 10% of the current balance before i transfer so that the balance is lower therefor the 180day charge will be lower? I can then just add what I have withdrawn back into the new ISA?   Is that correct or am I missing something?   Btw I only have about £2000 taken up of this years allowance, the full 20k from last year.

As far as I know, only Shawbrook allows further additions without restrictions over the full term and is usually near the top of the table. There might be others but with probably uncompetitive rates. Best to check on moneyfacts first and with any potential providers. 

First, your Barclays ISA has previous tax years money in it and is fixed. 

Here you can calculate if it is worth to ditch and switch: https://www.moneysavingexpert.com/savings/isa-switch-calc/

The second point, yes, you can withdraw 3 times and that will lower your penalty but you will also when transferring to a different provider void the ISA protection on the funds withdrawn as you can't pay them back in with the new provider, even if the new account with a new provider is also flexible. So accepting the penalty on the full sum is probably cheaper or you bite the bullet and sit out the 2 years. Depending on your tax situation it is still  a good return, albeit I know it could be higher. Sitting in a similar boot with a 1y fix at 4.21% from end of April this year with Shawbrook.  

bristolleedsfan

andyhicks88 said:

Hi can anyone tell me the 1 or 2yr fixed rate ISA's available right now that allow further additions during the term?  I know most only have a small window to make additions but I'm after the ones that allow additions throughout the term. Is it just Shawbrook?

I think I read Lloyds Bank do as well. also  https://www.kentreliance.co.uk/isas

guli

andyhicks88 said:

Also whilst I'm here I will ask about this, I currently have a 2 year Barclays Fixed ISA at 4.1%, which is flexible, obviously there are way better rates now so I'm wanting to move but there is the 180 day penalty to transfer. Would I be correct in thinking that it would be wise then to take advantage of the fact you make 3 penalty free withdrawals of 10% of the current balance before i transfer so that the balance is lower therefor the 180day charge will be lower? I can then just add what I have withdrawn back into the new ISA?   Is that correct or am I missing something?   Btw I only have about £2000 taken up of this years allowance, the full 20k from last year.

you cannot make 3 penalty free withdrawals of 10% of current balance via an ISA transfer once it's fixed, ie. no partial transfers allowed. It's in the terms and conditions - cheeky buggers!

escape95

andyhicks88 said:

Also whilst I'm here I will ask about this, I currently have a 2 year Barclays Fixed ISA at 4.1%, which is flexible, obviously there are way better rates now so I'm wanting to move but there is the 180 day penalty to transfer. Would I be correct in thinking that it would be wise then to take advantage of the fact you make 3 penalty free withdrawals of 10% of the current balance before i transfer so that the balance is lower therefor the 180day charge will be lower? I can then just add what I have withdrawn back into the new ISA?   Is that correct or am I missing something?   Btw I only have about £2000 taken up of this years allowance, the full 20k from last year.

I took the 3 x 10% penalty free withdrawals before transferring to UTB, I then paid the withdrawn funds into a new ISA with Shawbrook as I had yet to subscribe this year.

hjghg5

pecunianonolet said:

hjghg5 said:

I'll have to leave mine as is, I think. I was planning on withdrawing a decent chunk from my existing Coventry ISA tomorrow to pay off my mortgage at the end of my fixed rate, then topping it back up over the course of the rest of the tax year from salary/maturing bonds. I don't think I've got enough time to transfer to the new rate before I withdraw, and then can't move until I've put the money back in.

An internal transfer and close to the new issue should be rather instant or next working day. I had to wait like 2 minutes to get through to a very friendly adviser on the phone so worth to give them a call and maybe you can get the funds transferred to the new ISA, withdraw tomorrow and you have the new rate and can pay back.

I gave it a go once I'd seen that other people had done it instantly and it's worked, feels a bit strange opening a limited access account and instantly using a withdrawal but there's logic to it, and the part of the funds that I don't need for the mortgage can earn the better rate while I top it back up.

refluxer

andyhicks88 said:

Also whilst I'm here I will ask about this, I currently have a 2 year Barclays Fixed ISA at 4.1%, which is flexible, obviously there are way better rates now so I'm wanting to move but there is the 180 day penalty to transfer. Would I be correct in thinking that it would be wise then to take advantage of the fact you make 3 penalty free withdrawals of 10% of the current balance before i transfer so that the balance is lower therefor the 180day charge will be lower? I can then just add what I have withdrawn back into the new ISA?   Is that correct or am I missing something?   Btw I only have about £2000 taken up of this years allowance, the full 20k from last year.

Yes, you can make the 3 x 10% withdrawals which would lower the balance and therefore presumably the transfer penalty but (as mentioned above) if you then transferred that ISA elsewhere, you'd lose the ISA status of those withdrawn funds and so paying them back into a different ISA would count towards your 2023-24 ISA allowance.

This would obviously be undesirable to someone who maxes out their ISA allowance each year because (depending on the sums we're talking about) you'd stand to lose a fairly big chunk of this year's £20k allowance. If you were OK with that though, then making those withdrawals would seem to be a way to reduce the penalty but, as always, make sure you do your calculations carefully to ensure you don't lose out. I would probably start with using the MSE 'ditch and switch' calculator to work out how much better or worse off you'd be with both the full balance and the balance less those withdrawals.

Speaking of this year's allowance - is this tax year's £2k in that same Barclays ISA or elsewhere ? If it's in the same ISA, then I'm not sure where you'd stand once you start making your 10% withdrawals - ie. can you withdraw 3 x ~£2k and claim that the 2023-24 £2k is still in the ISA and therefore you're going to transfer that money (along with the previous tax year subscriptions) to a new ISA and can continue to add the remainder of your 2023-24 allowance to it ? When you make partial transfers, you're often able to state whether the transfer includes this year's subscriptions or not but I don't know how this works with withdrawals, as I've no experience of making one. As you'd stand to lose the ISA status of those withdrawn funds anyway, then it may not make any difference one way of the other I guess but it's a possible complication that you'll at least need to consider in order to ensure you don't break any ISA rules.