Fixed rate ISA in years to come and 85k safety

Dallybally

Hi. Similar to the other recent thread, I’ve got a fixed rate ISA, I’m very lucky and it’s 40k, next year I’ll have another 20k to put in. I can simply transfer that all into 1, and I’ll have 60k, yay. 

However, the year after I won’t want to put any more in the same bank, because that will end up close to the 85k gov backed limit. I can simply open another, but then what can I do with the 60k? You can only open 1 cash ISA per year, so I’ll have no choice but to leave the 60k in whatever provider and the interest rate is bound to plummet when the fixed rate ends, or not use my ISA allowance for a year as I’ll have to use it just to transfer the 60k to a higher interest. 

I know this is a very lucky issue to have, I do work 2 jobs and inherited a bit, but does anyone know what I can do? 

Thanks a lot. 

Rodders53

Read the sticky!!!  https://forums.moneysavingexpert.com/discussion/6290021/isas-tax-free-savings-sticky


It explains all.  You can only not invest NEW money into more than one ISA in any tax year. 

Old ISA monies can be transferred to better rate-paying ISAs as often as one wishes (subject to fund T&Cs wrt interest penalties that may apply. Transfer not withdraw and reinvest!

Doctor_Who

You can open as many cash ISAs as you like for the purpose of transferring previous years' ISA subscriptions. You can only open and fund (with new money) one cash ISA per tax year.

Dallybally

Thanks a lot both, I read “fund” as meaning add in transfers too

Albermarle

Dallybally said:

Thanks a lot both, I read “fund” as meaning add in transfers too

If you scroll through the forum, you will see this is a common misconception.

bigbars

I was or am in a similar position. My fixed rate cash isa with virgin is close to the limit. The hassle to attempt to reduce it will be difficult as most providers don’t accept or allow partial transfers in or out. So I will just move it to better rates as and when required and pray virgin doesn’t go under as it’s the amount over the 85k which isn’t covered and at risk. 

Pertinent to this is the dates of maturity, I have a staggered system for my multiple fixes which poses more problems. So I have to pick just one each your to fund or start a new one.

With your opportunity and level of advanced planning I would move the 60k isa to better rates as and when possible but not add funds to it and open a new one for your next allowance with a different provider to whichever holds the 60k as the 85k limit is by provider not isa. Also essential to make sure providers don’t fall under the same parent institution as that can make you fall foul for 85k.

I never anticipated rates to be high enough to bring mine close to the limit and was naive on the planning to the point my interest once added this year or next will take me over.

frustrating to keep an eye on but manageable once you are aware. especially thanks to some of the great contributors to this forum. Otherwise I would have just one huge isa.

Malchester

Deleted_Userlj said:

I was or am in a similar position. My fixed rate cash isa with virgin is close to the limit. The hassle to attempt to reduce it will be difficult as most providers don’t accept or allow partial transfers in or out. So I will just move it to better rates as and when required and pray virgin doesn’t go under as it’s the amount over the 85k which isn’t covered and at risk. 

Pertinent to this is the dates of maturity, I have a staggered system for my multiple fixes which poses more problems. So I have to pick just one each your to fund or start a new one.

With your opportunity and level of advanced planning I would move the 60k isa to better rates as and when possible but not add funds to it and open a new one for your next allowance with a different provider to whichever holds the 60k as the 85k limit is by provider not isa. Also essential to make sure providers don’t fall under the same parent institution as that can make you fall foul for 85k.

I never anticipated rates to be high enough to bring mine close to the limit and was naive on the planning to the point my interest once added this year or next will take me over.

frustrating to keep an eye on but manageable once you are aware. especially thanks to some of the great contributors to this forum. Otherwise I would have just one huge isa.

If virgin don't allow partial transfers (when you can transfer part to one ISA and the rest to a different one with a different provider) one way is to transfer the funds to an easy access ISA and as soon as the transfer is complete transfer out to however many ISAS you want 

bigbars

I personally thought of that with my own scenario, but it is difficult as most providers do not allow partial isa transfers, so then your pool of available products is limited, then bit convoluted situation to allow a maturing fix to go to a easy access, transfer part then move rest into a fix. so for me, i am just living with it and not adding any further funds to the virgin fix, risky i know, but with multiple fixes in progress maturing at different times, options are limited.

my own example to give you scope is i try and do my deposits around the new tax year to maximise length of time in the product, ive just gone to a new virgin fix a few weeks ago so matures august 24, i have a secure trust fix which matures september 23, which will then go to a new fix for september 24, ybs fix matures december 23. 

Albermarle

Deleted_Userlj said:

I personally thought of that with my own scenario, but it is difficult as most providers do not allow partial isa transfers, so then your pool of available products is limited, then bit convoluted situation to allow a maturing fix to go to a easy access, transfer part then move rest into a fix. so for me, i am just living with it and not adding any further funds to the virgin fix, risky i know, but with multiple fixes in progress maturing at different times, options are limited.

my own example to give you scope is i try and do my deposits around the new tax year to maximise length of time in the product, ive just gone to a new virgin fix a few weeks ago so matures august 24, i have a secure trust fix which matures september 23, which will then go to a new fix for september 24, ybs fix matures december 23. 

RE comment in bold. Just to keep things in perspective, the risk is minimal. To be avoided if possible, but as you say its a trade off against the potential hassle of moving funds around, especially if you are only just over the £85K limit.

surreysaver

Malchester said:

Deleted_Userlj said:

I was or am in a similar position. My fixed rate cash isa with virgin is close to the limit. The hassle to attempt to reduce it will be difficult as most providers don’t accept or allow partial transfers in or out. So I will just move it to better rates as and when required and pray virgin doesn’t go under as it’s the amount over the 85k which isn’t covered and at risk. 

Pertinent to this is the dates of maturity, I have a staggered system for my multiple fixes which poses more problems. So I have to pick just one each your to fund or start a new one.

With your opportunity and level of advanced planning I would move the 60k isa to better rates as and when possible but not add funds to it and open a new one for your next allowance with a different provider to whichever holds the 60k as the 85k limit is by provider not isa. Also essential to make sure providers don’t fall under the same parent institution as that can make you fall foul for 85k.

I never anticipated rates to be high enough to bring mine close to the limit and was naive on the planning to the point my interest once added this year or next will take me over.

frustrating to keep an eye on but manageable once you are aware. especially thanks to some of the great contributors to this forum. Otherwise I would have just one huge isa.

If virgin don't allow partial transfers (when you can transfer part to one ISA and the rest to a different one with a different provider) one way is to transfer the funds to an easy access ISA and as soon as the transfer is complete transfer out to however many ISAS you want 

Virgin allow partial transfers. I did one two weeks ago. Just just have to message them to get a human to do it as there isn't the option on the website 

bigbars

Thanks, No I know Virgin do, but its the other providers which are few and far between. Transferring out from Virgin, getting a provider with a decent rate that also accepts a partial transfer in, thats where my problem lies.

Some products are barely staying active for days before being pulled at the moment.

Fixes only accept transfers and deposits during the initial phase usually 28 days after set up, so I would have to run an easy access for a number of months to align it to the new tax year. Which I did previously have with Virgin, but spent the last few months rate chasing.
Ive learnt from this mistake and now will not get myself in that position again.