Fixed Rate ISA

BOFFA

Can somebody please confirm the general rules for Fixed rate ISA. I'm looking at 3 year or 5 year
Is the maximum deposit the same as a cash ISA of £20,000 ?
Can I also transfer funds from an expiring ISA into the fixed rate ISA?

MX5huggy

Yes because it is a Cash ISA. 

Depends on if the particular provider allows it. Who is it? 

BOFFA

I was considering UBL Bank as they seem to have the best rate at the moment

eskbanker

Cash ISAs (whether fixed or variable) don't offer particularly good value for money these days, so unless you're already using all of your personal savings allowance or feel it important to have the option of accessing the money during the term, chances are you'd be better off using taxable accounts that pay significantly better rates:

https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/#fixedsavings

BOFFA

It says they allow transfers in but does that mean £20,000 (for the current year allowance)  PLUS whatever you transfer in from another ISA ? 

eskbanker

BOFFA said:

It says they allow transfers in but does that mean £20,000 (for the current year allowance)  PLUS whatever you transfer in from another ISA ? 

Yes, properly-executed transfers between ISAs don't count towards the annual contribution limit, which only relates to new current year money.

BOFFA

Sorry, me again ! So if I transfer funds in from an old ISA do those funds then receive the same interest rate and are they also tax free because they are linked to the new ISA?

eskbanker

BOFFA said:

Sorry, me again ! So if I transfer funds in from an old ISA do those funds then receive the same interest rate and are they also tax free because they are linked to the new ISA?

Yes, the transferred money just becomes part of the balance of the new account and so is treated identically, except for subsequent activities that need to differentiate between old and new money, such as onward partial transfer (unlikely to be applicable here) and the ISA manager submitting annual reports to HMRC.

BOFFA

Thank you so very much for your advice, its much apprciated

Albermarle

BOFFA said:

Sorry, me again ! So if I transfer funds in from an old ISA do those funds then receive the same interest rate and are they also tax free because they are linked to the new ISA?

Just to be clear you only need to inform the receiving ISA that you want to transfer in an older ISA ( and give them the details of course) You do not have to contact the old ISA provider directly or do anything else.

jimjames

BOFFA said:

Sorry, me again ! So if I transfer funds in from an old ISA do those funds then receive the same interest rate and are they also tax free because they are linked to the new ISA?

Just to be clear on this. There is normally a window to transfer after opening to receive the fixed rate, it isn't an open ended offer to pay the same interest rate. So you will need to check the rate that is applicable. But it will always be tax free inside an ISA and if you transfer using the ISA transfer process.