When to transfer ISA?

heidihendersen

I have a cash ISA with Lloyds. The bonus on this will end and the rate becomes even more miserly so I will transfer. Is there anything I need to watch out for in terms of when I should transfer? As far as I understand, whenever I request the transfer any interest earned that has yet to be paid would be transferred over so no interest is ever lost. Is this correct?

Will there be any confusion over the years? The amount in Lloyds is for the past year, I intend to transfer it but not add any from the next fiscal quota until late in the year (probably March 2016).

jimjames

How much is in the ISA?

Are you aware of the higher rates you can get elsewhere?

Gadfium

Personally, I would ask the current ISA provider. There's no point in risking transferring it and losing the interest, is there?

You could also transfer the cash ISA to another provider and move it to a Stocks & Shares ISA to allow you to invest in the market. This might suit you depending on your goals and aims?

heidihendersen

jimjames wrote: »

How much is in the ISA?

Are you aware of the higher rates you can get elsewhere?

Not relevant.

Yes.

jimjames

heidihendersen wrote: »

Not relevant.

Yes.

Actually very relevant.

If you have £1000 in an ISA the reply would be very different to if you have £50,000 in it.

heidihendersen

Gadfium wrote: »

Personally, I would ask the current ISA provider. There's no point in risking transferring it and losing the interest, is there?

You could also transfer the cash ISA to another provider and move it to a Stocks & Shares ISA to allow you to invest in the market. This might suit you depending on your goals and aims?

I don't want to deal with Lloyds customer service or branch. I would rather transfer after it ends, can't lose anything more than a few days of interest that way.

Yes, or I could withdraw and put it on black and give a spin.

xylophone

http://www.thisismoney.co.uk/money/saving/article-1583864/Best-savings-rates-Isas-Cash-Isa-accounts-fixed-rate-Isas.html

bowlhead99

So just to get this straight...

You came on here to ask whether there was anything to watch out for when you did the transfer. The advice was to ask Lloyds how it works for your particular product. For example, for all we know, it is a fixed term ISA which rolls over to another deal automatically and charges an interest penalty if you exit either of the products before seeing out the whole term.

Your response was that you don't want to deal with Lloyds customer services or branch because you can't lose anything more than a few days of interest anyway? So, it seems like you know the product you have, you definitely want to transfer it out, you definitely don't want to stick it in a non ISA account earning higher rates (e.g. 4% in Lloyds current account, 3% Santander etc), and you definitely don't want to ask Lloyds customer service or branch about any terms and conditions.

All that is left for us to wonder in, what was the point of the original question about what to look out for? There is not much value we can add to this transfer journey you're going to embark on if you know how it works.

It is true that accrued interest will be included in the transfer out value as long as you have met the terms and conditions to earn it. To transfer it out, you have to go to the place you're transferring it into that accepts transfers in, and get them to process the transfer, rather than manually paying it out via online banking, so that it stays within the HMRC-approved ISA wrapper without losing status.

Will there be any confusion over the years? The amount in Lloyds is for the past year, I intend to transfer it but not add any from the next fiscal quota until late in the year (probably March 2016).

When you physically do the transfer doesn't matter in terms of preserving 'years'. When you fill out the transfer forms the transferee bank will ask you what year(s) it relates to. If it is this year's contributions it will keep its status as current year contributions. If it's last year's contributions it will keep its status as last year's contributions. You just tell the new provider what it is, and Lloyds will confirm the status to them. You mention the amount you have is 'for the past year' but whether that means 2013/14, a past and completed year, or it is the contributions you've put in over the past year (2014/15), I don't know. It's important to be aware that you can't split up a current year contribution but you can split up previous years'. But sounds like you are transferring it all in one lump anyway.

The fact that you have this money whether in Lloyds or transferred somewhere else won't affect your ability to contribute £15240 of new money against next year's allowance between Apr 15 and Apr 16.

Gadfium

heidihendersen wrote: »

I don't want to deal with Lloyds customer service or branch..

OK, so read the T+Cs of the ISA on their webpage.

heidihendersen wrote: »

I I would rather transfer after it ends, can't lose anything more than a few days of interest that way.

Dunno.
Seeing as how you haven't really given any details, and seem disinclined to provide any, I've had to fall back on this method.....

heidihendersen wrote: »

Yes, or I could withdraw and put it on black and give a spin.

The crystal ball says red, not black. Ignore it's advice at your peril.