How to transfer my ISA cash without losing tax benefits?

blon

Hello,
my Sainsbury's Cash ISA I opened last year announced today that the interest rate would be cut from 2% to 1%. I deposited GBP 5640 during the 2012-13 tax year into this ISA, and another GBP 2500 this tax year.

Now I'd like to close the Sainsbury's ISA (as they offered) and move funds to other ISAs without losing any of the tax benefits.

- I'd like to move last year's GBP 5640 (and earned interest) to my Sippdeal Stock & Shares ISA (I know there's not way back to a cash ISA with that money after that, but given the very low interest rate I'd like to invest more in stocks). I know that Sippdeal does not charge for funds being transfered in, but how exactly do the logistics work? Is there a direct transfer from one ISA to another or does it go through my current bank account? Again, I want to avoid losing any of the tax benefits.
- I'd like to move the GBP 2500 I paid in during the current tax year to another cash ISA that accepts transfers like the one by BM Savings at 1.75%. How does that work? Will I lose any of the interest accrued in the Sainsbury's ISA up to the current date?

Any suggestions with respect to a good cash ISA except the one on the MSE transfer old ISA page ?

I greatly appreciate any helpful comment.

Thanks,
Bob

MoneySaverLog

You need to open a ISA with a provider that allows transfers in.

Then complete a transfer form for the money to be moved from your old provider to your new provider. Your new provider (S&S and Cash ISA) should provide the transfer form.

Whether you lose any interest, will depend on the terms of your current ISA.

Archi_Bald

You don't need to open a new S&S ISA. Just ask Sippdeal for a transfer form.

If you leave all the moving to the ISA providers, you won't lose the tax free status. If you move any money yourself, or if you close the ISA, the tax free status is lost forever.