FIXED ISA termination before maturity advice.

eric4395

Never did this before so just looking for advice regarding i took a fixed rate isa out for 2 years ago  in aug 2021 the sum was  £25,144 at 0.91% 
If i was to close this down and terminate it now i would be subject to penalisation of 180 days interest  which i calculate as quarter of what would have been approx £460  interest if i left it till maturity ie about £115
So taking that 115 of what my interest is after 12 months (£227 ) i make it i would have 25144 + the £107   i have left ie a total of approx £25250.
I havent used my isa allowance this year so if i put £20000, into a new 12 month fixed rate isa at 3.85% then this would make about £770 ish over the year in interest.
Also obviously i could use the other £5000   and put it in a fixed rate for 12 months. Can anyone verify that my calculations are near enough and it would be a sensible thing to do or am i missing something.

eskbanker

Without getting the calculator out, your workings look about right for the proceeds from the existing account, although you'd earn another couple of months interest for August to October.

However, if you transfer from that old ISA to a new one, this isn't affected by the £20K annual contribution limit, so you could simply transfer the entire £25+K to your chosen new account, as long as you do so via the new provider's ISA transfer process.

eric4395

Thanks eskbanker I was under the impression I couldn't do that but on reading the t&c again I now see you can transfer into a new one at a much better rate.