Coventry BS - Internal Transfer

throughtheblue

I have a Help to Buy ISA, which by the end of the tax year I would've paid £2400 into, leaving £17600 of my ISA allocation. I want to make utilise my full ISA allocation, and have opened a CASH ISA with Cov BS. I currently have a Cov BS saver and want to move the sum of it over into the cash ISA. I have more in my saver than the remainder of my yearly ISA allowance, meaning I will have to transfer the sum in two goes, one amount before the end of the financial year, and the remaining in the new financial year.

Question 1: Do internal transfers at CovBS count as withdrawals against the account? I have a limited access saver, and would prefer to make one transfer, but as stated above I won't be able to. Other option is I withdraw the total sum into my bank account, but then it will take me 3 days to get the money into the ISA without incurring fees?

Question 2: Am I right in thinking I should be saving in my Cash ISA (which has a slightly lower interest rate) compared to my limited access saver, as over the years I can build it up and avoid paying tax on interest, providing it's not over my £20k allowance? 

jak22

With a limited access account like this one solution might be to open a Easy Access (online) and transfer the total amount you want to move into that account all in one go and then transfer smaller amounts from the Easy Access to where they're needed. Anything except the regular monthly/annual interest payments count as withdrawals.

An ISA makes sense if there's a chance you'l be paying tax on savings interest https://www.gov.uk/apply-tax-free-interest-on-savings. The 20K limit applies to each tax year.

throughtheblue

jak22 said:

With a limited access account like this one solution might be to open a Easy Access (online) and transfer the total amount you want to move into that account all in one go and then transfer smaller amounts from the Easy Access to where they're needed. Anything except the regular monthly/annual interest payments count as withdrawals.

An ISA makes sense if there's a chance you'l be paying tax on savings interest https://www.gov.uk/apply-tax-free-interest-on-savings. The 20K limit applies to each tax year.

That's a good idea, thanks. Are there any issues with opening multiple savings accounts? With my limited access saver, I'm probably in the region of £800 annual interest, so presumably I should get prepared to take advantage of this year and following years ISA allowance.

allegro120

throughtheblue said:

jak22 said:

With a limited access account like this one solution might be to open a Easy Access (online) and transfer the total amount you want to move into that account all in one go and then transfer smaller amounts from the Easy Access to where they're needed. Anything except the regular monthly/annual interest payments count as withdrawals.

An ISA makes sense if there's a chance you'l be paying tax on savings interest https://www.gov.uk/apply-tax-free-interest-on-savings. The 20K limit applies to each tax year.

That's a good idea, thanks. Are there any issues with opening multiple savings accounts? With my limited access saver, I'm probably in the region of £800 annual interest, so presumably I should get prepared to take advantage of this year and following years ISA allowance.

I had multiple saving accounts with Coventry for many years, no issues.

Expotter

I hope you are aware of the fact that a Help to Buy ISA is also classified as a cash ISA and, unless your HTB ISA is also with Coventry BS and they allow for split cash ISAs, you can only pay into one cash ISA per year. So what you intend to do would not be within the rules.
You are however, allowed to pay into a different kind of ISA in the same year up to the £20k allowance in total.

See
https://www.moneysavingexpert.com/savings/best-cash-isa/#needtoknows

• 7.You can only have one current year's cash ISA open at any time – though some providers let you split it

  You can only be subscribed to (pay into) one cash ISA with one provider in any tax year – so you can't usually open both a fixed cash ISA and easy-access cash ISA (for example) in the same tax year.
  

  However, the below providers do allow this, as long as all opened ISAs are with the same provider and the total balance doesn't exceed the £20,000 ISA allowance:
  

  • Aldermore
    
  • Charter Savings Bank
  • Ford Money
  • Kent Reliance
  • Nationwide
  • NatWest
  • Newcastle Building Society
  • Paragon Bank
  • Post Office
    

  This all sits separately to the rule that allows you to split your £20,000 ISA allowance across all ISA types, so you could, for example, still deposit £3,000 into a junior ISA, £4,000 into a Lifetime ISA and £13,000 into a cash ISA all in the same tax year.

throughtheblue

Expotter said:

I hope you are aware of the fact that a Help to Buy ISA is also classified as a cash ISA and, unless your HTB ISA is also with Coventry BS and they allow for split cash ISAs, you can only pay into one cash ISA per year. So what you intend to do would not be within the rules.
You are however, allowed to pay into a different kind of ISA in the same year up to the £20k allowance in total.

See
https://www.moneysavingexpert.com/savings/best-cash-isa/#needtoknows

• 7.You can only have one current year's cash ISA open at any time – though some providers let you split it

  You can only be subscribed to (pay into) one cash ISA with one provider in any tax year – so you can't usually open both a fixed cash ISA and easy-access cash ISA (for example) in the same tax year.
  

  However, the below providers do allow this, as long as all opened ISAs are with the same provider and the total balance doesn't exceed the £20,000 ISA allowance:
  

  • Aldermore
    
  • Charter Savings Bank
  • Ford Money
  • Kent Reliance
  • Nationwide
  • NatWest
  • Newcastle Building Society
  • Paragon Bank
  • Post Office
    

  This all sits separately to the rule that allows you to split your £20,000 ISA allowance across all ISA types, so you could, for example, still deposit £3,000 into a junior ISA, £4,000 into a Lifetime ISA and £13,000 into a cash ISA all in the same tax year.

Thanks, you saved me from making a big mistake. My HTB is actually with Nationwide, so I would be able to open cash another ISA with them? Although, I would have to wait till the new financial year, as I stupidly opened the CovBS cash ISA which I won't even be using now.
It's a difficult decision because Nationwide's triple access ISA is 0.75% less than what I'm getting in my saver. 

Expotter

As long as you haven't paid anything into the Coventry ISA, I don't believe there's any problem with closing it and opening another one with the Nationwide.
I'm not quite sure how this split ISA's work though, so I would contact them first. And if their rate is rubbish you could transfer it in the new tax year to a different provider.
If you intend to keep paying into your Help to Buy, you're always going to have the same problem. So if you're definitely saving to buy a house, maybe you should consider transferring it into a LISA, which is in its own category and would allow you to pay into a cash or S&S ISA as well.

throughtheblue

Expotter said:

As long as you haven't paid anything into the Coventry ISA, I don't believe there's any problem with closing it and opening another one with the Nationwide.
I'm not quite sure how this split ISA's work though, so I would contact them first. And if their rate is rubbish you could transfer it in the new tax year to a different provider.
If you intend to keep paying into your Help to Buy, you're always going to have the same problem. So if you're definitely saving to buy a house, maybe you should consider transferring it into a LISA, which is in its own category and would allow you to pay into a cash or S&S ISA as well.

I pay in the maximum of £200 each month and have done since 2019, but ideally want to get on the property ladder, but until something meets my criteria, I'm in no rush, so may have it for a while longer. 
If the rates stay roughly the same, then by the end of the next tax year my interest will be going over the £1000 free tax threshold. 
Am I able to earn up to £1000 in interest in a regular saver each tax year, and then keep whatever would take me over £1000 in interest in an ISA?
EDIT: Just read that interest in ISA's don't count towards personal allowance threshold. 

Expotter

You should have a look at the dedicated ISA section in this forum

https://forums.moneysavingexpert.com/categories/isas-tax-free-savings

Plenty of answers to nearly everything to do with ISAs.