Adding to a fixed rate ISA

Rtj123

Hi all
I opened a fixed rate isa in July 2023 at 5%. I put in around 10k. I’m wondering if I can add an extra 5k into it now? With adding in now, will I get the 5% on the 5k? As it hasn’t been in the ISA for 12 months when I get to July? 

I am correct in thinking when I get to July I will get my interest? I selected to have the interest in lump sum after twelve months.
many thanks.

PeskyBlunder

You need to check the T&Cs for the account. Most fixed rate ISAs have a relatively short funding window so it's likely that you will not be allowed to do this - check the T&Cs.

eskbanker

Rtj123 said:

Hi all
I opened a fixed rate isa in July 2023 at 5%. I put in around 10k. I’m wondering if I can add an extra 5k into it now? With adding in now, will I get the 5% on the 5k? As it hasn’t been in the ISA for 12 months when I get to July? 

I am correct in thinking when I get to July I will get my interest? I selected to have the interest in lump sum after twelve months.
many thanks.

As above, it's unlikely (but not impossible) to be able to continue to fund a fixed term ISA after its initial funding window, but if it is possible, then you'll only earn pro rata interest, based on the balance on each day, i.e. you can't pay £5K in halfway through the term and expect to receive the full 5% interest on that amount, you'd earn roughly half that.

Rtj123

Thanks for your input. So I may be best in opening another isa and putting the 5k into that to get full interest?

eskbanker

Rtj123 said:

Thanks for your input. So I may be best in opening another isa and putting the 5k into that to get full interest?

That's not really a valid conclusion from what I posted, i.e. that £5K will earn 1/365th of the stated interest rate for every day it's in an account.  However, it's academic anyway if you don't have the option of continuing to fund the existing account, have you ascertained that yet?

Rtj123

eskbanker said:

Rtj123 said:

Thanks for your input. So I may be best in opening another isa and putting the 5k into that to get full interest?

That's not really a valid conclusion from what I posted, i.e. that £5K will earn 1/365th of the stated interest rate for every day it's in an account.  However, it's academic anyway if you don't have the option of continuing to fund the existing account, have you ascertained that yet?

Sorry, yes, I’ve looked into the t&c’s and I can’t add to the account, I am over the window to put in anymore.

Janie2008

Rtj123 said:

Thanks for your input. So I may be best in opening another isa and putting the 5k into that to get full interest?

You need to wait to the new tax year in April to put your £5000 in a new isa. 

refluxer

Rtj123 said:

eskbanker said:

Rtj123 said:

Thanks for your input. So I may be best in opening another isa and putting the 5k into that to get full interest?

That's not really a valid conclusion from what I posted, i.e. that £5K will earn 1/365th of the stated interest rate for every day it's in an account.  However, it's academic anyway if you don't have the option of continuing to fund the existing account, have you ascertained that yet?

Sorry, yes, I’ve looked into the t&c’s and I can’t add to the account, I am over the window to put in anymore.

In which case, you can't open and fund a second cash ISA with your remaining 2023-24 ISA allowance.

You could (in theory) open a new one, transfer your existing ISA into it and then add more from your allowance but you'd need to pay a penalty in order to transfer away within the fixed rate period which means doing so might not be a good idea.

eskbanker

If not using the rest of your 2023/24 allowance would compromise your plans for 2024/25 then you could always open and fund an ISA of a different type, such as a S&S one, leaving it uninvested or in something low risk, and then transfer into a cash one in the new tax year.

Albermarle

Are you sure you actually need to use an ISA, for all savings? You can earn some interest in non ISA savings accounts without paying tax. 
Tax-free savings: check if you're eligible - Money Saving Expert

Although normally you can not add to any fixed term savings account after the funding window closes ( with a few exceptions) having a non ISA savings account, means you do not have to worry about how much you can add each tax year, transfers, withdrawals  etc

badger09

Rtj123 said:

eskbanker said:

Rtj123 said:

Thanks for your input. So I may be best in opening another isa and putting the 5k into that to get full interest?

That's not really a valid conclusion from what I posted, i.e. that £5K will earn 1/365th of the stated interest rate for every day it's in an account.  However, it's academic anyway if you don't have the option of continuing to fund the existing account, have you ascertained that yet?

Sorry, yes, I’ve looked into the t&c’s and I can’t add to the account, I am over the window to put in anymore.

Who did you open your fixed rate ISA with? There are a few providers eg Aldemore, Ford Money, Nationwide, who let you split your ISA allowance. If it’s with one of them, you could open another this year & pay in up to £15k without breaking HMRC rules