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Applied for Fixed Cash ISA yesterday, can I close (without depositing) and open another cash?

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Decided to apply for a Virgin Money 1 Year Fixed ISA last night, but sods law this morning there's been a bit of a jump and it's no longer the leading interest rate.

I know the rules are that you can only open one cash ISA per financial year - but I was wondering about the technicalities of what is considered an opened ISA? If I don't deposit any money and close the account, can I then apply for another cash ISA this year? 

I'm guessing not... but throwing it out there in case someone out there knows otherwise.

Thanks in advance.

Comments

  • rallycurve
    rallycurve Posts: 171 Forumite
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    edited 24 June 2022 at 10:14AM
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    Yes, you can open another ISA as long as you haven't funded this one. You can only put new money into one ISA every tax year.
  • steveksullivan
    steveksullivan Posts: 560 Forumite
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    edited 24 June 2022 at 10:25AM
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    Absolutely you can - there is also a 14 day cooling off period, even if you had already funded the new ISA (which you haven't) - and as stated in the previous post, the rules are that you can only FUND ONE ISA WITH NEW MONEY each tax year.  You can, in theory OPEN as many as you like.... and can also TRANSFER 'old' money as often as you like, although paying the interest penalties for each account.

    I don't think theres even any need to close the first ISA, although this may happen automatically if not funded within the relevant timeframe.

    Having said that, just in case interest rates rise rapidly over the coming year, bear in mind Virgin's very favourable lower interest penalties if you wanted to transfer early, compared with Paragon's small interest rate benefit.

    I will be sticking with Virgin ..... at least for the moment ...!!
  • DG24
    DG24 Posts: 6 Forumite
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    Absolutely you can - there is also a 14 day cooling off period, even if you had already funded the new ISA (which you haven't) - and as stated in the previous post, the rules are that you can only FUND ONE ISA WITH NEW MONEY each tax year.  You can, in theory OPEN as many as you like.... and can also TRANSFER 'old' money as often as you like, although paying the interest penalties for each account.
    Thanks Steve - funnily enough all I'm looking to do is transfer 'old' money - I've not paid in to a cash ISA this year.

    So you can actually open and move the 'old' money about as many times as you like (whilst accepting interest penalties)? That's really good to know, especially with interest rates likely to keep increasing in the immediate future.
  • steveksullivan
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    Yes - that's right. The ISA rules require you to have 'instant' access to your money whilst paying the interest penalties. Different to fixed rate accounts where you have no access to your money until the end of the fixed rate period.

    Given my comments .... and your last paragraph.... look at the interest penalties from Virgin and Paragon, if you did want to switch later in the year. I've gone for the 2yr and Virgin are 90 days, Paragon are 180 days ....big difference!!
  • DG24
    DG24 Posts: 6 Forumite
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    Given my comments .... and your last paragraph.... look at the interest penalties from Virgin and Paragon, if you did want to switch later in the year. I've gone for the 2yr and Virgin are 90 days, Paragon are 180 days ....big difference!!
    Very good point! 90 days doesn't too bad for the Virgin 2 year fixed rate... will have to do some number crunching tonight.

    Cheers again for the help!
  • steveksullivan
    steveksullivan Posts: 560 Forumite
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    edited 24 June 2022 at 5:23PM
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    DG24 said:

    Cheers again for the help!
    @DG24 NP !!!! I've had a lot of help myself here in the past ......
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