Noob Question ISA 2 Year Fixed Rate - Deposits in 2nd Year Allowed? 10 November 2022 at 8:59AM in ISAs & tax-free savings 12 replies 433 views

FieyrP125

Should be an easy one this 

Looking at 2 year fixed Cash ISA's

However ALL the T&C's / Info I read state no further deposits after a certain time frame once opened (usually 14 days)

My question is that I am guessing that the above is only in that first tax year.  Once the 2nd tax year starts I can deposit a further £20k into that same 2 year fixed ISA?  Or do I need to open another ISA - is that 2 year fixed ISA closed for 2 years once the initial deposit is made?

All the info seems to point to that fact as they all state further deposits are not available and does not state can make a further deposit in the 2nd year - just wanted to check that is correct and it is not poorly worded.

Many thanks

savit4l8er

No further deposits after the specified  timeframe into that ISA.  So if they offer 14 days, that's the time you can place deposits in it. 

Malchester

FieyrP125 said:

Should be an easy one this 

Looking at 2 year fixed Cash ISA's

However ALL the T&C's / Info I read state no further deposits after a certain time frame once opened (usually 14 days)

My question is that I am guessing that the above is only in that first tax year.  Once the 2nd tax year starts I can deposit a further £20k into that same 2 year fixed ISA?  Or do I need to open another ISA - is that 2 year fixed ISA closed for 2 years once the initial deposit is made?

All the info seems to point to that fact as they all state further deposits are not available and does not state can make a further deposit in the 2nd year - just wanted to check that is correct and it is not poorly worded.

Many thanks

The vast majority only allow deposits within a funding window {usually anything from 14 to 30 days) and then that's it. There certainly were a few that allowed additional deposits later (Shawbrook Bank was one) but don't know of any at the moment. For continuing deposits you need an easy access account which allows deposits (up to the annual maximum) at any time and withdrawals in accordance with the terms and conditions of the account.

An alternative is to open a 1 year fixed rate account and, when it matures, transfer it to a new account and add the new annual allowance as well. But you have to make a judgement about where interest rates will go over the next year or so.

FieyrP125

Cheers for fast replies

So least I know - at the moment, these 2yr fixed ISA's are limited to your initial opening deposit and thats it for the 2 years.

However in 2023/4 I could then open a new ISA with a new provider and deposit my new allowance in that one.  So would have 2 x ISA's running then - but that is not allowed is it - can only have 1 x Cash ISA at one time

So if I opened a 2 year fixed ISA today - in May of 2023 I could not open another Cash ISA for 1 year as there would be 2 running at the same time.  So would lose my tax free allowance - only option would be to close that 2 year one and transfer it into the 1 year one PLUS my new £20k allowance limit

Is that correct?

Malchester

FieyrP125 said:

Cheers for fast replies

So least I know - at the moment, these 2yr fixed ISA's are limited to your initial opening deposit and thats it for the 2 years.

However in 2023/4 I could then open a new ISA with a new provider and deposit my new allowance in that one.  So would have 2 x ISA's running then - but that is not allowed is it - can only have 1 x Cash ISA at one time

So if I opened a 2 year fixed ISA today - in May of 2023 I could not open another Cash ISA for 1 year as there would be 2 running at the same time.  So would lose my tax free allowance - only option would be to close that 2 year one and transfer it into the 1 year one PLUS my new £20k allowance limit

Is that correct?

You can have as many ISAs as you want running at the same time. The restriction is that you can only pay into 1 cash ISA in any financial year. You could open and fund a cash ISA today (of any length or easy access). However if you only fund it using part of this years allowance you cannot put the remaining part of the allowance into any other cash ISA, just the one you will have funded. Then, on 6 April 2023, the new financial year begins and your £20000 annual allowance begins again.

In theory, if you wanted two years allowance in one ISA you could open a one year ISA now then in a years time, when it matures, you could open another ISA (with the same  provider or a different one) fund it with next years allowance and request a transfer of the ISA you open this year into it. An ISA transfer is not classed as new funds.

Another alternative would be to open a new ISA towards the end of March 2023 and fund it on 1 April (say) using this years allowance, then on 6 April add next years allowance giving you two years allowance in the same ISA.

FWIW I have just moved from 4 separate ISAs to 2 by transfers.

FieyrP125

Many thanks - all clear!

Albermarle

To clarify one point. The restriction on only being able to fund fixed rate within 14 days (or thereabouts) applies to all fixed rate accounts, not just ones held in an ISA.

So to be clear the restriction about later funding, is not connected in any way with whether you have the savings in an ISA or not.

ISA rules can be a bit confusing, so it can pay to scroll through this forum, reading various posts, to keep up to speed.

Ocelot

I currently have 13 cash ISAs so definitely allowed!

andyhicks88

So you can have more than 1 ISA in any given year as long as you only pay in 20k between them, is that right?

eskbanker

andyhicks88 said:

So you can have more than 1 ISA in any given year as long as you only pay in 20k between them, is that right?

No, you can have as many as you like but can only pay new money into one of each type in any tax year, so you could fund a cash one and a S&S one concurrently but not two cash ones.

SickGroove

Just jumping in on this thread...

In April this year I transferred my current Cash ISA from one provider to another one and then put in this year's 20K allowance....Last month I then transferred all over to Shawbrook Bank 1 Year Cash ISA to get a much better rate...80K in total held

My question is, from April 6th 2023, can I top up my 80K Shawbrook Bank Cash ISA with 5K from the new 20K 2023 allowance or will I need to just open an Easy Access Cash ISA with the 5K and then transfer the 5K PLUS the 80K held in the Shawbrook Bank Cash ISA into either a new fixed rate or easy access Cash ISA, once the Shawbrook Bank Cash ISA matures in October 2023?

Think I've just answered my own question typing that but any confirmation / advice would be appreciated.

Cheers