Early closing of a fixed rate ISA

Aldi1234

I'm considering closing my fixed rate ISA before maturity (it's fixed at 1%, need I say more). I thought I heard somewhere that in addition to the penalty for closing the account I wouldn't be able to transfer to another ISA. Is that correct?

refluxer

You can either close the account and get your money back or, if you wanted to preserve the tax-free status of your funds, you would transfer directly to another ISA using the new provider's ISA transfer process. Both of those options will involve a penalty if you are within a fixed rate period.

refluxer

Whether it's better to close/transfer it or leave it will depend on how long the fix is for, how much you have saved and when the maturity date is ?

Taking a 1 year fixed-rate, for example, the penalty can vary between 60 and 120 days interest, with 90 days being common. The account T&Cs will tell you this, though.

jimjames

Aldi1234 said:

I'm considering closing my fixed rate ISA before maturity (it's fixed at 1%, need I say more). I thought I heard somewhere that in addition to the penalty for closing the account I wouldn't be able to transfer to another ISA. Is that correct?

Not sure where you heard that but no it isn't correct.

masonic

It is unlikely you paid money into this ISA during this tax year, which is the only reason you might be prevented from opening another cash ISA during this tax year (if you simply withdrew the money). Even then, there is a cash ISA self-transfer loophole whereby such a breach of the rules would be disregarded if done once in any tax year. You are certainly permitted to transfer directly into a new ISA at any time.

SallySunshine

Hurts me to say but I have a fixed 3yr Isa with the Coventry, taken out Nov. 2020. 0.85%! Cringe when I look at it on my spreadsheet.
Trying to find out what the penalty clause is, how many days loss of interest etc.
I'll probably be willing to take the hit to close and transfer the large sum that is in it.
Since I was no. 35 in the queue when I rang them today, could be a long haul!