Help with transferring an ISA from a previous year into a new 2020/21 ISA

THEV1LL4N

Hi all,

I just need some advice about transfers.

Currently, I have £27k with Santander in my matured 2019/20 Cash ISA which was recently changed to a 0.6% (ISA Saver account), but yesterday they emailed to say that the interest rate will be going down to 0.1%.  I was already planning to find a better rate with another provider, but this further rate reduction has made this even more of a reason to leave Santander.

Now, here's my question:
If transferring this entire amount (£27k) in to a new 2020/21 Cash ISA (e.g. Shawbrook, Bath or Coventry BS), will they pay their advertised interest rate (e.g. 1.2%) on just this year's allowance (up to £20k), or the entire amount that I transfer in plus this year's allowance?

Advice and any sources would be much appreciated.

Thank you!!

afis1904

They will pay the interest rate on the full balance but that interest rate might go down in the next twelve months if it's a variable rate.

badger09

Make sure you use the new ISA provider's transfer process, rather than move your £27k yourself. Also, if you are transferring into a fixed rate product, make sure you pay in this year's allowance within the timeframe stipulated - typically 14 to 30 days.

Albermarle

Interest rates are slipping downwards, even for the more competitive providers. If you can tie up the money a fixed rate ISA is almost certainly a better bet . However the best deals are disappearing so I would not hang about.

soulsaver

We know nowt about you (other than your football team?) so the comment don't let the ISA status necessarily determine your choices may not  be way off:
If you are BR tax payer and don't exceed the £1k pa interest Personal savings allowance you could consider Vanquis Bank 1.6% 1 year fix (not an ISA) and be way better off?