Opening two cash ISAs with same provider (one for new subscriptions and the other for transfers in)

ToTo_Man

I'm looking to subscribe to Shawbrook's 1Yr Fixed Term ISA at 5.78% for the 2023-24 tax year as I haven't yet subscribed to an ISA for this tax year.  I have, however, transferred an ISA that I subscribed to during the 2022-23 tax year to a provider with a more competitive rate in June 2023 (Natwest 1Yr Fix at 4.40%). This rate is no longer competitive and I'm looking to transfer this ISA again.

The Shawbrook 1Yr Fixed Term 5.78% ISA accepts transfers in of previous ISAs. However, their T&Cs state:

"You can only open and operate one Cash ISA account with Shawbrook in any single tax year".

Does this mean my only option is to transfer my 2022-23 ISA into the new ISA that I'm going to making a subscription to?  I thought it was possible to open two ISAs with the same provider in the same tax year provided that only one of them is being funded with 2023-24 subscriptions?

Doctor_Who

The wording in a lot of ISA T&Cs leaves a lot to be desired. You are correct that you can only open and subscribe to a single cash ISA each tax year, but you can open as many as you like for the purpose of transferring previous years' ISA subscriptions. Shawbrook may mean you can only open and subscribe to one cash ISA per tax year or they may have specific T&Cs limiting you to having only one cash ISA - probably best to call or message them.

ToTo_Man

I've messaged Shawbrook for clarification and am waiting to hear back.  I do have another question I'd be grateful if you could answer (assuming you know of course!).  How does the interest penalty work if you withdraw less than the total value of the ISA?  Is the penalty applied only to the amount withdrawn or to the whole amount?

Doctor_Who

The penalty for transferring out (or withdrawing money) from a fixed rate ISA is normally a number of days' interest (e.g. 60 to 180 days depending on the length of the fix). So the penalty will be based on the amount transferred or withdrawn. However, partial transfers out/withdrawals are often not allowed for fixed rate ISAs, you need to check the T&Cs, meaning you may have to transfer the whole amount.

Slinky

ToTo_Man said:

I've messaged Shawbrook for clarification and am waiting to hear back.  I do have another question I'd be grateful if you could answer (assuming you know of course!).  How does the interest penalty work if you withdraw less than the total value of the ISA?  Is the penalty applied only to the amount withdrawn or to the whole amount?

@ToTo_Man did you get a response to your question with Shawbrook? I've opened a fix a couple of months ago for this year's allowance, but have a maturing ISA elsewhere I'd like to move some of the funds to get the 5.78% rate.

ToTo_Man

Slinky said:

ToTo_Man said:

I've messaged Shawbrook for clarification and am waiting to hear back.  I do have another question I'd be grateful if you could answer (assuming you know of course!).  How does the interest penalty work if you withdraw less than the total value of the ISA?  Is the penalty applied only to the amount withdrawn or to the whole amount?

@ToTo_Man did you get a response to your question with Shawbrook? I've opened a fix a couple of months ago for this year's allowance, but have a maturing ISA elsewhere I'd like to move some of the funds to get the 5.78% rate.

I haven't had a reply from Shawbrook to my question yet but will let you know when I do.