ISA TRANSFER 18 January 2022 at 3:24PM in ISAs & tax-free savings 3 replies 161 views

Diamondsgirl

I pay 40% tax, so have put some money into two separate ISA's.  The cash ISA with Virgin Money is due to end at the end of February 2022.  I am looking for a higher rate return, but want to know if I should transfer before end of February or afterwards, taking into account I have not added money to this ISA in this financial year?  We re only talking about £16,000.  My other ISA is with Paragon. 
Thanks

eskbanker

If you're asking about whether to transfer a fixed term cash ISA to another provider or product before or after its maturity, then afterwards seems the most sensible approach, as there will usually be penalties applied to premature withdrawals.

It's not clear if you already understand this or not, but just to be sure, you can only pay new money into one cash ISA in any tax year, but transfers don't count for this.

Diamondsgirl

Thanks, was not absolutely sure about transferring as opposed to new money, so thanks for clarifying that.  I am now going to wait until the end of Feb to transfer the money over.  Having read about the preference for putting the money into a normal savings as opposed to an ISA, I shall also look at whether it is financially sensible to do this depending on its affect on my tax position.  Thanks again

refluxer

When it arrives, make sure you read your maturity letter/email carefully or (better still) check the original T&Cs now to find out what happens when your fixed rate Virgin Cash ISA matures. Normal practice (in my experience) is for this to automatically convert into an Easy Access 'Maturity' Cash ISA, from which you are usually then free to transfer to another company without penalty.

Occasionally though, some Fixed Rate products are automatically renewed for the same period again at the current interest rate, so it's worth checking this definitely isn't the case (and take action if it is) if you're wanting the option to transfer elsewhere or choose a different product.