Might have messed this up!

KattoNS

So I have a 20k ISA from previous tax year sitting in a low interest account with my current account provider. I know, I know, not great money management but I am trying to improve!

Id like to transfer it into a regular 1 year fixed rate saver account but am not sure if I am able to do this? Is that normally fine? What do I need to look for? Thank you!!

Dazed_and_C0nfused

You should be able to withdraw the money from the ISA (or close the account) and open a fixed rate bond and then pay in the £20k.

Some of the better (by interest rate) fixed rate bonds have time limits for paying Ng money in so maybe sensible to have the money in your current(?) account before opening the fixed rate account.

Daliah

You can do this but unless your new account is an ISA, you will lose the ISA wrapper.

If the new new account is an ISA, you must ask the new provider to make the transfer for you

xylophone

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

https://www.thisismoney.co.uk/money/article-1621507/Best-savings-rates-Fixed-rate-accounts.html

wiseonesomeofthetime

Daliah said:

You can do this but unless your new account is an ISA, you will lose the ISA wrapper.

If the new new account is an ISA, you must ask the new provider to make the transfer for you

I sometimes wonder if this wrapper is that important, for some, atm.

For example, I locked my money away in an 18-month fixed rate ISA with Nationwide for 0.75% tax-free, in March.

With 12 months left at that rate, my money could have been earning me twice that, 1.50%, in an Atom 1-Year Fixed Saver.

Even if I ended up paying tax on it, the rate would still beat the ISA, at 1.20%

xylophone

For example, I locked my money away in an 18-month fixed rate ISA with Nationwide for 0.75% tax-free, in March.

Did you get the £50 on top? This improves the situation a little.

DireEmblem

How about the Hargreaves Active Savings accounts - not sure you can have them in an ISA, but would allow the opportunity to switch to investing as well in the same platform?

Edit: They have a Cash ISA, but limited interest account options.

Aminatidi

I wouldn't give up the wrapper unless I had absolutely no choice.

It might be £20K in cash now but in the future it could be that you want to put it into stocks and shares where that wrapper could be really beneficial.

Daliah

wiseonesomeofthetime said:

Daliah said:

You can do this but unless your new account is an ISA, you will lose the ISA wrapper.

If the new new account is an ISA, you must ask the new provider to make the transfer for you

I sometimes wonder if this wrapper is that important, for some, atm.

I agree, it's totally down to a person's circumstances whether a tax wrapper is appropriate or not. Fact remains that if you withdraw money from an ISA, it loses its tax wrapper. If you want to preserve the tax wrapper, you have to ask the new provider to make an ISA transfer.

grumiofoundation

wiseonesomeofthetime said:

Daliah said:

You can do this but unless your new account is an ISA, you will lose the ISA wrapper.

If the new new account is an ISA, you must ask the new provider to make the transfer for you

I sometimes wonder if this wrapper is that important, for some, atm.

For example, I locked my money away in an 18-month fixed rate ISA with Nationwide for 0.75% tax-free, in March.

With 12 months left at that rate, my money could have been earning me twice that, 1.50%, in an Atom 1-Year Fixed Saver.

Even if I ended up paying tax on it, the rate would still beat the ISA, at 1.20%

The issue is not that you saved in an ISA but that you fixed the money. Interest rates rising were the risk your took. Although with a fixed rate ISA you can pay a penalty and access the cash if you wish…