Opening ISA just to get a higher interest rate

JeffHill

I have two ISAs, one reached is one year maturity a couple of days ago, while the other one reaches that point next week. They are with two separate Building Societies and at maturity their rates fall from 1.40% to 0.25% and 1.50% to 0.35%, respectively. However both BS have better offerings on their website of 1%. I know I can only open one new cash ISA a year however my question is whether can I open an ISA in each BS just to make use of the higher interest rates. I suspect I know the answer but would be interested for any thoughts. Also I do not want to merge them into one account as this would put me over the threshold for the FCA  DPS, which is not some thing I would want to do, particularly in these uncertain times. Thanks

eskbanker

JeffHill said:

I know I can only open one new cash ISA a year however my question is whether can I open an ISA in each BS just to make use of the higher interest rates.

Many people seem to think they 'know' that but it's a misconception - you can open as many cash ISAs as you like but can only pay new money into one in any given tax year.  Transfers of prior year money aren't affected by this rule so you can open new cash ISAs with separate institutions for transferring in the existing accounts - check that they accept transfers in though.

colsten

For clarity, may I add that there is no such thing as an FCA DPS. I believe you mean the FSCS, which is a statutory scheme funded by the financial services industry.