Cash ISAs: The Best Currently Available List

pecunianonolet

savit4l8er said:

pecunianonolet said:

dc_scotland said:

The Virgin Money Easy Access Cash ISA Exclusive (issue 2) is now paying 4.76%, up from 4.51%

I hope somebody can answer this question:

OH has opened a flexible ISA with Coventry last tax year and put the full 20k in. On the 6th of April £19.999 were taken out to use in other "open market" accounts, some was spent, etc. Aim was to max out PSA with higher rates before we pay back in to the ISA.

Since it is technically old money, OH should be able to transfer to a different provider at any point. 

The question is now, do the £19.999 need to be paid in to Coventry first and then a switch would be initiated to e.g. Virgin (flexible) or could the current balance of £1 be transferred and as part of that transfer the £19.999 allowance would transfer as well? 

Meaning that OH would just need to pay back the £19.999 now to Virgin instead of Coventry by the end of the tax year to keep the protection status.

From a HMRC perspective, 20k were under ISA protection on 5th April 2023 land all they care about is the balance on 5th April 2024. What happened in between with a flexible ISA  doesn't concern HMRC. 

However, do the banks work the same way?

The rule is the money must be paid back into the account it was withdrawn from. It must be paid back to Coventry before the transfer. 
If not, any repayment of funds that were withdrawn under the flexible ISA rules becomes impossible and funds paid in to the new provider will count towards the remaining ISA allowance.

Right, phoned Coventry and they looked up the T&C's for me. They state that funds need to be repaid when transferring to a different provider. On the question if the flexible element would also transfer between accounts internally they had to double check with back office.

The only option is:

Pay back in the sum which has been taken out, in this case into the old 4.35% account, to reach the original funding level (20k plus any interest gained since opening). Once paid back in a transfer and close could be arranged and the old ISA at 4.35% would close and it all would move into the new 4.9% account. Once done we could withdraw again and a new flexible agreement would be created. Any funds taken out would again need to be repaid by the end of the tax year to remain ISA protected. The current tax year allowance remains untouched (not used yet).

Probably have to leave it and hope this account will be around for a bit as all the cash is tied up in much higher paying regular savers and fixes at the moment.

Obviously, the easiest would be if the rate on the old account would increase

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.