ISA Contributions When Transferring From Fixed Rate Account

JamesY201

Hi

Bit of advice for something I think I already know then answer to, so apologies for the question. I opened a fixed rate ISA in April and contributed a small amount owing to my own misunderstanding as to the time frame I was able to contribute. I am now left with an underused ISA. Could I transfer it out to another ISA and complete the year's allowance? I suspect not.

Albermarle

Yes you could but the Fixed rate isa you would be leaving will have a penalty clause for early closure.
However if you have not got much in there it might not be very much.

Doctor_Who

JamesY201 said:

Hi

Bit of advice for something I think I already know then answer to, so apologies for the question. I opened a fixed rate ISA in April and contributed a small amount owing to my own misunderstanding as to the time frame I was able to contribute. I am now left with an underused ISA. Could I transfer it out to another ISA and complete the year's allowance? I suspect not.

Yes, being this year's subscription it would need to be a full transfer to a new ISA and there will be a penalty. You can use the MSE calculator to determine the penalty, but as Albermarle says, if the balance is low the penalty shouldn't be very much.

https://www.moneysavingexpert.com/savings/isa-switch-calc/

JamesY201

Doctor_Who said:

JamesY201 said:

Hi

Bit of advice for something I think I already know then answer to, so apologies for the question. I opened a fixed rate ISA in April and contributed a small amount owing to my own misunderstanding as to the time frame I was able to contribute. I am now left with an underused ISA. Could I transfer it out to another ISA and complete the year's allowance? I suspect not.

Yes, being this year's subscription it would need to be a full transfer to a new ISA and there will be a penalty. You can use the MSE calculator to determine the penalty, but as Albermarle says, if the balance is low the penalty shouldn't be very much.

https://www.moneysavingexpert.com/savings/isa-switch-calc/

So just to be clear. If I transferred £10k from this year's contribution, I could still make a further contribution of 10K this year?

badger09

JamesY201 said:

Doctor_Who said:

JamesY201 said:

Hi

Bit of advice for something I think I already know then answer to, so apologies for the question. I opened a fixed rate ISA in April and contributed a small amount owing to my own misunderstanding as to the time frame I was able to contribute. I am now left with an underused ISA. Could I transfer it out to another ISA and complete the year's allowance? I suspect not.

Yes, being this year's subscription it would need to be a full transfer to a new ISA and there will be a penalty. You can use the MSE calculator to determine the penalty, but as Albermarle says, if the balance is low the penalty shouldn't be very much.

https://www.moneysavingexpert.com/savings/isa-switch-calc/

So just to be clear. If I transferred £10k from this year's contribution, I could still make a further contribution of 10K this year?

If £10k is the total amount of new money you have paid into your ISA since 6/4/23, then yes. Once the transfer is complete, you can make a further contribution of £10k. 

If the new ISA is also a fixed rate, do check how long you have to fund it. Most allow a relatively short time, as you have discovered.