Deposits into a fixed term Cash ISA - confused

Zuzi

I took advantage of the Santander offer with 50 pound voucher when a Cash ISA is transferred in. I did not have a Cash ISA before but quickly opened one with my bank (FD), put 10,000 in and then opened a Santander ISA at 3.7% and transferred in the FD. I received confirmation of transfer completion a few days ago and the 10K is showing when I log into online banking.

Now I do have a small S&S ISA but that's only got ca 300 pounds in, with another ca 300 that will be added between now and April. That leaves me with let's say 9,000 pounds that can still be added to an ISA this year.

I just spoke to Santander CS because I wanted to know whether I can make further deposits to the new ISA. They said that this is only possible in the first 14 days and that time has already run out. This being a fixed term ISA, it's an answer I expected - but now something is bugging me. He then said: "but some April 2023 you will be able to deposit money into it again".

If it's a one year fixed term ISA, is that even right? If the funding window is indeed 14 days, then I won't be able to make any further deposits until it matures, I think? A new financial year will not change that... I understand the "you can only pay in 20K a financial year into one cash and one S&S ISA", but with the fixed term element, I'm confused.

Any advice would be much appreciated.

Albermarle

 He then said: "but some April 2023 you will be able to deposit money into it again".

It is them who are confused, not you ! The above statement is plainly wrong.

Zuzi

Thanks @Albermarle , that confirms what I am thinking. I'm trying to ignore the fact that this happens to be an ISA, it's a fixed term savings account in a tax wrapper, and as such it makes sense to me that only a limited number of days at the start of the one year period can be used for depositing money in it.

Albermarle

Zuzi said:

Thanks @Albermarle , that confirms what I am thinking. I'm trying to ignore the fact that this happens to be an ISA, it's a fixed term savings account in a tax wrapper, and as such it makes sense to me that only a limited number of days at the start of the one year period can be used for depositing money in it.

There were some posts some time ago, that one bank was allowing more deposits during the year, even when general interest rates had gone down. At first there was some scepticism, but it turned out that Shawbrook did allow extra deposits, although they retained the right to remove the facility at any time.
This is very much not the norm and may well not be active anymore. Anyway with interest rates rising, nobody would want to deposit more money in an existing fixed rate anyway.

Zuzi

To be honest, I probably would have topped up this ISA if it was possible  - it's a good rate, much higher than what Santander is currently offering (the 3.7% has been pulled already) and because it's now my "Cash ISA of choice" for the year 22/23 I feel like I am wasting the 9K of my 20K allowance...

eskbanker

Zuzi said:

To be honest, I probably would have topped up this ISA if it was possible  - it's a good rate, much higher than what Santander is currently offering (the 3.7% has been pulled already) and because it's now my "Cash ISA of choice" for the year 22/23 I feel like I am wasting the 9K of my 20K allowance...

If you have £9K and want to get it into the ISA shelter to avoid 'wasting' any of this year's allowance, you could pay it into your S&S ISA (late in the tax year), leave it uninvested, then transfer it to a cash ISA in the next tax year, assuming both providers support partial transfers.

Zuzi

Thanks @eskbanker

I wasn't sure what you meant by "leave it uninvested" but I checked my S&S ISA provider (it's Wealthify) and they do have an option to park some of the money in cash, so I guess that's the equivalent. They also do support partial transfers (I checked), so this sounds like a good plan, thank you again.