Noob Question ISA 2 Year Fixed Rate - Deposits in 2nd Year Allowed?

refluxer

SickGroove said:

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.

With a fixed rate cash ISA, you usually only have a limited time to fund it and beyond that, you can't transfer or pay anything further into it. This means you won't be able to top up your existing 1 year fix midway through with anything from next year's allowance.

If you already have £80k in a single cash ISA, then you're much better off opening a new one with next year's allowance and keeping it separate anyway from an FSCS point of view, as it'll allow the £80k ISA to gain interest for a year or two without taking you over the £85k limit.

If you were to take out a new fixed rate ISA early in the next tax year, you would then have the makings of a ladder-type savings system - ie. two different points in the year (around 6 months apart) where you could take advantage of the best rate available at the time, rather than putting all your eggs in one basket by continually combining and adding to a single ISA which (as you're finding) starts to make it unwieldy.

isasmurf

There isn't a specific time limit for making a deposit into a Shawbrook fixed rate ISA. You can make further deposits to it for as long as it remains open to additional funding.