Maturing Fixed Rate Cash ISA

Ade99

Hi,

Just when I start to think that I understand Cash ISAs I then doubt myself.  I'm here after some advice please.

I opened a 1 yr fixed rate cash ISA in Oct 2022 (ISA1) (tax year 22/23).  I intend to open another 1 yr fixed rate cash ISA on 6th April 2023 (ISA 2) (tax year 23/24). 

When ISA 1 matures in Oct 2023 and the interest rate with that provider then being offered is likely low, I would want to move the matured funds away into a better rate fixed cash ISA.

Q) Can I move those funds into ISA 2 so long as ISA 2 allows transfers in (and not just transfers in at the point of opening)?  Both ISAs will have the maximum in them.

Thanks.

masonic

Yes, you can do as you suggest in theory, but it is unlikely a 1 year fixed ISA would accept transfers 6 months after opening.

Ade99

Ok, thank you.  I think I have 3 options:

1. In Oct 2023 when it matures, i'd reinvest with the same provider in another of their 1 yr fixed rate Cash ISAs, possibly at a lower interest rate than it matured at.

2. Try and transfer it to the new fixed rate cash ISA i'll open in tax year 23/34 but as you've said, it's unlikely that they would allow a transfer in 6 months after opening it.

3. Open another new fixed rate cash ISA (also in tax year 23/24) with a new provider on a better interest rate. Is this allowed because it's from 'matured funds' and not 'new funds' so to speak?

Thanks.

Ocelot

Yes, Option 3 is fine. I've opened 4 ISAs in the current tax year, transferring funds from existing ISAs with various providers. In fact you don't even have to wait until maturity to transfer out (however there will be a stiff penalty if you do this).