Fixed rate cash ISA

von

Hi, I currently have money in a fixed rate cash ISA which is paying a paltry amount of interest. It is due to end on 23rd March. I want to open an ISA with Barclays paying 4% but I have already paid my £20k allocation for this year into my current ISA. 

If I close my current ISA today (I realise I will have to pay a penalty in interest)  can I open a new one with Barclays and transfer the money from my old ISA to the new ISA and can I put £20k in the new ISA? 

Also, if I can’t put £20k in the new ISA can I open an ISA just by transferring money from an old ISA without putting any money into it? 

Undervalued

I think you have posted this in the wrong section!

This section of the forum is for employment questions!

MSE_ForumTeam5

Undervalued said:

I think you have posted this in the wrong section!

This section of the forum is for employment questions!

We've moved the thread. If you think a thread is in the wrong place, please use the 'report' button and we can moved it. This is preferable to asking the OP to post again, and ending up with two threads on two boards).

eskbanker

von said:

Hi, I currently have money in a fixed rate cash ISA which is paying a paltry amount of interest. It is due to end on 23rd March. I want to open an ISA with Barclays paying 4% but I have already paid my £20k allocation for this year into my current ISA. 

If I close my current ISA today (I realise I will have to pay a penalty in interest)  can I open a new one with Barclays and transfer the money from my old ISA to the new ISA and can I put £20k in the new ISA? 

Also, if I can’t put £20k in the new ISA can I open an ISA just by transferring money from an old ISA without putting any money into it? 

Just to be clear, you paid £20K of new money into a fixed rate ISA after 6 April 2022, and the same product matures less than a year later on 23 March 2023?

Assuming that is the case, then you can't transfer its contents to a new one and put (another) £20K into the new one, but should be able to fund the new one with the transfer - make sure that you use the new provider's ISA transfer process though.

25_Years_On

von said:

If I close my current ISA today (I realise I will have to pay a penalty in interest)

If you close an ISA today the money will lose it's tax free ISA status and you won't be able to invest anything in an ISA until next financial year. You don't close you transfer.

refluxer

von said:

If I close my current ISA today (I realise I will have to pay a penalty in interest)  can I open a new one with Barclays and transfer the money from my old ISA to the new ISA... 

Obviously, just make sure you do your sums carefully to ensure that the amount you gain between now and March 23rd by transferring to the higher rate is more than the penalty you'll pay for transferring before the current fixed rate ISA matures because the closer you get to the end of a fixed rate period, the higher the risk of potentially losing out (especially for a longer fix with a more severe penalty), although this obviously very-much depends on the rates in question.

fryedslyce

You could try opening the Barclay's ISA in the next few days, you then have 30 days from opening to make a transfer request.
Late February make a transfer request to Barclays, to be initiated when your current fixed ISA ends.
The terms and conditions of the Barclay's ISA only say that a transfer request must be made within 30 days, not that the funds have to be in the account in 30 days.

rinnin

fryedslyce said:

You could try opening the Sharklay's ISA in the next few days, you then have 30 days from opening to make a transfer request.
Late February make a transfer request to Sharklay's, to be initiated when your current fixed ISA ends.
The terms and conditions of the Sharklay's ISA only say that a transfer request must be made within 30 days, not that the funds have to be in the account in 30 days.

Anyone speculating we'll have any new interest rate rises before 6th April 2023 to make transferring our Cash ISAs even more attractive?
Do most banks charge a 90 day's interest penalty?

Band7

rinnin said:

Do most banks charge a 90 day's interest penalty?

It varies from ISA to ISA. The longer the fix, the more penalty days, usually. There are no hard and fast rules though, not even within the same provider, - you must check the penalty clause that applies to the ISA you have.

rinnin said:

Anyone speculating we'll have any new interest rate rises before 6th April 2023 to make transferring our Cash ISAs even more attractive? 

My guess is that we might well see slightly higher ISA rates before April if, as expected, the base rate goes still higher. Who knows, though. 

Albermarle

rinnin said:

fryedslyce said:

You could try opening the Sharklay's ISA in the next few days, you then have 30 days from opening to make a transfer request.
Late February make a transfer request to Sharklay's, to be initiated when your current fixed ISA ends.
The terms and conditions of the Sharklay's ISA only say that a transfer request must be made within 30 days, not that the funds have to be in the account in 30 days.

Anyone speculating we'll have any new interest rate rises before 6th April 2023 to make transferring our Cash ISAs even more attractive?
Do most banks charge a 90 day's interest penalty?

Fixed term cash ISA rates seem to have peaked around November. The current expectation of a couple more base rate rises, is already largely taken account of in the current fixed rate offers. Remember when offering a fixed rate the provider is looking over the whole period of the fix rate, not just what is happening today .