CURRENT TAX YEAR SAVE 8 November 2021 at 11:11AM in ISAs & tax-free savings 5 replies 121 views

ETHERED

Have opened a Fixed Rate cash ISA this current tax year (2021/22) funding it by a transfer of ISA savings made in past tax years.
Unfortunately the new provider does not allow any deposits outside of 30 days of account approval.
To use my 2021/22 £20000 ISA allowance I will only be able add to this Fixed Rate account over the year.  Outside the 30 day threshold! 
I don't want to abort the application since it is a much better rate than my current provider and a  product recommended by comparison sites. 
Since I have not used any of my  £20K 2021/22 ISA allowance can I open a second ISA with another provider and save exclusively to it over the year ? 

refluxer

Yes - based on what you've said (and providing you used the new provider's official ISA transfer process rather than closing the old ISA yourself), then you should be OK to use the one you've just opened for the transferred funds and open a different ISA for your 2021/22 allowance. This doesn't necessarily have to be with a different provider, either. As I understand it, you can do as many transfers as you like during the tax year (subject to the ISA T&Cs) but you can only pay 'new money' into any one Cash ISA each tax year.

The bit about using the new provider's ISA transfer process is important though - if you close an old ISA and transfer the money yourself, then that counts as 'new money' and you won't be able to contribute to any other Cash ISAs that same tax year.

One thing to bear in mind is that you would normally use a lump sum for a Fixed Rate ISA as they have a limited window for deposits, as you've already discovered. If you're wanting to contribute to it throughout the tax year, then a Fixed Rate ISA won't be suitable - you'll need an easy access ISA (or possibly limited access, depending on your circumstances) instead.

Albermarle

Unfortunately the new provider does not allow any deposits outside of 30 days of account approval

Many have only a 14 day window.

Also often the offer is only available in the first place for a short period of time .

ETHERED

I used the providers official transfer process. I understand that if I had withdrawn the funds from my existing provider that I would have lost the tax free "umbrella" and paying it into the new providers fixed ISA would have counted as new money.  

ISA rules as I understood them state that I can only subscribe to one ISA in any tax year.
I did not know how to interpret that since it "subscribe" could mean it applies to past savings as well as new.

refluxes advice is that I can indeed open an ISA with another provider and put new money into it for this tax year since I have only transferred old monet to the Fixed ISA.

Will look now for an easy access ISA provider with a good rate.  (Cynergy or Leeds possibly)

eskbanker

ETHERED said:

ISA rules as I understood them state that I can only subscribe to one ISA in any tax year.
I did not know how to interpret that since it "subscribe" could mean it applies to past savings as well as new.

'Subscribe' is ISA-speak for 'pay new money into', so transferring prior year money around doesn't contravene that rule (which is actually about subscribing to one ISA of each type in any tax year).

ETHERED said:
I have only transferred old monet to the Fixed ISA.

Didn't realise that the works of impressionist painters could be contributed to ISAs....

ETHERED

Just a Typo, but I do have a Claud Monet hanging on my dining room wall.
Pity it's just a faded reproduction of his "Sunrise"