Fixed rate Cash Isa

Me72

Hello.
Opened a Fixed interest Cash Isa in April. Is it possible to transfer to another Isa, with better rate, or will I lose interest doing that ? 

Bigwheels1111

Which isa did you take out ?.

Read the T&C.

Virgin are 60, 90, 120 days interest penalty.

Easy sum, 10k @ 5% = £500 interest / 365 X penalty days ie 60, 90, 120 or more.

There is a calculator on MSE, but I like to do the working out myself.

Doctor_Who

Me72 said:

Hello.
Opened a Fixed interest Cash Isa in April. Is it possible to transfer to another Isa, with better rate, or will I lose interest doing that ? 

Do you mean in this tax year? You can transfer a fixed rate ISA but there is likely to be a penalty. The MSE ISA calculator can help you decide if it's worth paying the penalty to transfer to a higher rate ISA.

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

NewPieman

Interesting question - I did a Shawbrook in April at 4.06%.....now Shawbrook offering 5.71% on a Fixed 1 year......throwing round numbers looks like it would be £200 early exit fee......the difference in interest is around £330, so a gain of £130.....

Would it be just a matter of opening a new account and then doing the transfer - paying the exit fee and its fixed for another year?

I also have a Shawbrook 1 year fixed from last tax year (opened late in the tax year) - wonder whether it's worth transferring that at the same time to the higher rate - again penalty would "around" £200

Albermarle

Would it be just a matter of opening a new account and then doing the transfer - paying the exit fee and its fixed for another year?

Yes,

If you ( and the OP) scroll through the forum you will see a lot of similar questions and answers, so you can get fully up to speed on ISA transfers.

Doctor_Who

NewPieman said:

Interesting question - I did a Shawbrook in April at 4.06%.....now Shawbrook offering 5.71% on a Fixed 1 year......throwing round numbers looks like it would be £200 early exit fee......the difference in interest is around £330, so a gain of £130.....

Would it be just a matter of opening a new account and then doing the transfer - paying the exit fee and its fixed for another year?

I also have a Shawbrook 1 year fixed from last tax year (opened late in the tax year) - wonder whether it's worth transferring that at the same time to the higher rate - again penalty would "around" £200

The question comes up all the time! If the ISA was opened and funded (new money) in this tax year then you have to transfer the whole balance (no partial transfers are allowed). You can open a new ISA with any provider and do a transfer-in (obviously the new provider must accept transfers), your old provider will apply the penalty fee prior to transferring the money.

Ozzig

NewPieman said:

Interesting question - I did a Shawbrook in April at 4.06%.....now Shawbrook offering 5.71% on a Fixed 1 year......throwing round numbers looks like it would be £200 early exit fee......the difference in interest is around £330, so a gain of £130.....

Would it be just a matter of opening a new account and then doing the transfer - paying the exit fee and its fixed for another year?

I also have a Shawbrook 1 year fixed from last tax year (opened late in the tax year) - wonder whether it's worth transferring that at the same time to the higher rate - again penalty would "around" £200

I transferred an LBS ISA to a better-rated LBS ISA, they took off the penalty amount and changed the rate, really simple to do.

Shedman

NewPieman said:

Interesting question - I did a Shawbrook in April at 4.06%.....now Shawbrook offering 5.71% on a Fixed 1 year......throwing round numbers looks like it would be £200 early exit fee......the difference in interest is around £330, so a gain of £130.....

Would it be just a matter of opening a new account and then doing the transfer - paying the exit fee and its fixed for another year?

I also have a Shawbrook 1 year fixed from last tax year (opened late in the tax year) - wonder whether it's worth transferring that at the same time to the higher rate - again penalty would "around" £200

I think you're calcs are not right...you are taking the full 1 years interest from the 5.71% rate rather than the 8 months remaining on the initial year.  Your actual gain over the remaining period is only about £20 (you can check this using the link that Dr_Who posted above) so its marginal.  

Obviously you then have the 4 months afterwards at the higher rate but whether that is a positive depends on whether or not you think there are going to be better rates available next April when your initial 4.06% would mature

janusdesign

just so I can get this straight in my own head, I am in a similar position of taken out a 1-Yr ISA with Shawbrook @ 4.21% at the start of May - so it has still 9 months to run.

their latest rate is 5.71%, so using the above calculator, if I were to switch the penalty would be £209 - which is more or less the interest i've already earned in the last 3 months.

the MSE calculator seems to assume that the current end date doesn't change and tells me i'd be £15 better off - but I assume in reality that a new 1-Yr ISA with them would run Aug-Aug and so the correct figure would be around £90... is my thinking correct about the end date changing ?

savit4l8er

janusdesign said:

just so I can get this straight in my own head, I am in a similar position of taken out a 1-Yr ISA with Shawbrook @ 4.21% at the start of May - so it has still 9 months to run.

their latest rate is 5.71%, so using the above calculator, if I were to switch the penalty would be £209 - which is more or less the interest i've already earned in the last 3 months.

the MSE calculator seems to assume that the current end date doesn't change and tells me i'd be £15 better off - but I assume in reality that a new 1-Yr ISA with them would run Aug-Aug and so the correct figure would be around £90... is my thinking correct about the end date changing ?

The £90 will be including 3 months further interest, figures aside, you have the correct Idea. If your existing ISA was left, it would mature, if you put the money into another ISA, you would get interest for the 3 month and beyond but you will not know at what rate.