2 fixed rate ISAs, how do i join them?

Martxxx

Ok, I opened a 1 year fixed rate Cash ISA with Santander in October 2022 with 20K, so will mature in a few months. Then in April 2023 i opened a 1 Year Fixed Cash ISA with another 20K, this will Mature next April 2024. How on earth do i join them, or can i?  When first one matures, i can't transfer to the Virgin ISA because its fixed rate and no longer accepts deposits ( i have maxed it out anyway.) Also, i can't open another Cash ISA because i have already done so this tax year? Is this correct? So when first Cash ISA matures, is my only option to withdraw or open a S&S ISA to keep the tax free status of the 20K?  or can i open another Cash ISA in same year if its just a transfer? Ok thats a lot of questions, Apologies!

Doctor_Who

Martxxx said:

Ok, I opened a 1 year fixed rate Cash ISA with Santander in October 2022 with 20K, so will mature in a few months. Then in April 2023 i opened a 1 Year Fixed Cash ISA with another 20K, this will Mature next April 2024. How on earth do i join them, or can i?  When first one matures, i can't transfer to the Virgin ISA because its fixed rate and no longer accepts deposits ( i have maxed it out anyway.) Also, i can't open another Cash ISA because i have already done so this tax year? Is this correct? So when first Cash ISA matures, is my only option to withdraw or open a S&S ISA to keep the tax free status of the 20K?  or can i open another Cash ISA in same year if its just a transfer? Ok thats a lot of questions, Apologies!

You can open another ISA in this tax year in October for the purpose of transferring the matured Santander ISA, just don't subscribe new money since you've already used your allowance for this year (transferring a previous year's ISA does not use this year's allowance). As for joining the two ISAs, you could open a new easy access or fixed rate ISA now and transfer both fixed rate ISAs (the Virgin ISA would need to be a full transfer because it was subscribed this year), but that would involve paying two lots of penalty fees on the fixed rate ISAs. Better to wait until they mature and then transfer them to an easy access ISA if you really want to join the funds together.

Martxxx

Thank you for your prompt reply. So if i were to open an Easy Access ISA in October to transfer the matured Santander into, then open a new ISA (fixed or otherwise) in April 2024 and transfer both (new Easy access and Virgin) while adding another 20K, i would still be within the rules?  So many google searches the headline is " You can't open more than one similar type of ISA in one year" when in fact you can as transfers are not subject to same ISA conditions. Thank you for your help.

Doctor_Who

Martxxx said:

Thank you for your prompt reply. So if i were to open an Easy Access ISA in October to transfer the matured Santander into, then open a new ISA (fixed or otherwise) in April 2024 and transfer both (new Easy access and Virgin) while adding another 20K, i would still be within the rules?  So many google searches the headline is " You can't open more than one similar type of ISA in one year" when in fact you can as transfers are not subject to same ISA conditions. Thank you for your help.

Yes, open an EA cash ISA in October and transfer the matured Santander ISA (don't add any new money, you've already used your allowance for this tax year).

After 6 April 2024 open a new cash ISA (needs to accept transfers-in, note that fixed rate ISAs have funding/transfer windows) and transfer-in the matured Virgin fixed rate ISA and the EA ISA opened in October. Since these transfers are both previous year's subscriptions they don't affect your allowance for the 2024-2025 tax year so you can add £20K (within the funding window if a fixed rate).

You can open as many cash ISAs in a year as you like, but you can only subscribe (add new money) to one of them. You can use the others to transfer-in previous year's ISA subscriptions.

Albermarle

So many google searches the headline is " You can't open more than one similar type of ISA in one year" when in fact you can as transfers are not subject to same ISA conditions. Thank you for your help.

Forget Google, just read through this forum. Lots of questions and clear answers about ISA transfers.

refluxer

Martxxx said:

Thank you for your prompt reply. So if i were to open an Easy Access ISA in October to transfer the matured Santander into, then open a new ISA (fixed or otherwise) in April 2024 and transfer both (new Easy access and Virgin) while adding another 20K, i would still be within the rules?  So many google searches the headline is " You can't open more than one similar type of ISA in one year" when in fact you can as transfers are not subject to same ISA conditions. Thank you for your help.

What they should say is "you can't open (and subscribe to) more than one similar type of ISA in one year" (where a subscription is paying in 'new money' from the current tax year and doesn't include transfers from ISAs containing subscriptions from previous tax years).

Is there any particular reason you want to combine all these ISAs ? If you do that 3-4 times, it won't take long (especially with rates as high as they currently are) before you start approaching the FSCS limit and then need to start splitting them up again. This in itself can be a hassle, as not all ISAs allow partial transfers out so, if you ended up with one of these, you'd have to transfer out to one that does and then split it.

If you're keen on fixed rate ISAs, then one benefit of keeping ISAs from individual tax years separate is that it allows you to adopt a 'savings ladder' approach and take advantage of the best rate available at the time (at different times of the year), which helps to even out interest rate rises and falls rather than risking having all your eggs in one basket, so to speak. If you wanted to make things a little easier (and not end up with too many different ISA accounts) but also wanted to avoid FSCS limit issues in the future, then one option would be to think about only combining two at the most.

Martxxx

Thank you Refluxer, yes i take the point, of FSCS limits. Will keep both ISA's for now, Transfer Santander one this October to a new fixed, then next April Transfer to  new fixed and add funds, or add funds when i transfer again next October.