ISA and getting best return after maturity

sorethumbs1992

I have almost filled my first ISA for the 23/24 year - as it was a fixed rate it will mature in Aug 2024 so will keep it in the account until then.
In Aug the rate will end and no doubt return to a tiny interest rate.

If I open a 24/25 ISA in April and find a decent rate for the coming year am I right that I can transfer in the pot from this year (if transfers are allowed) after it matures in August.  So I can then earn better interest on the matured account and whatever I add myself towards the 24/25 allowance?

And secondly (if previous point is allowed)
If I find that when my current ISA matures in Aug there is an ISA rate better than the one I have opened for upcoming 24/25 already - Am I allowed to open a second ISA solely as somewhere to move my matured one (and to not add anything new)

And lastly - my 23/24 ISA pays back in to the same account when it matures as and end of term figure.  That figure will of course be above the 20K so can the whole amount be transferred to an ISA solely for a better rate - or do I have to trim it down and withdraw the interest earned this year so as to be able to transfer the max of 20K

refluxer

sorethumbs1992 said:

If I open a 24/25 ISA in April and find a decent rate for the coming year am I right that I can transfer in the pot from this year (if transfers are allowed) after it matures in August.  So I can then earn better interest on the matured account and whatever I add myself towards the 24/25 allowance?

Whether you can do this will depend on the type of ISA you choose. If you open an easy access cash ISA with a provider who accept transfers-in, then you would usually be free to transfer in a maturing ISA any time you like.

If you choose a fixed rate ISA, then these normally have a limited funding window (usually anything up to a month), in which case this wouldn't be possible with a 4 month gap. There are a few exceptions to this but even Barclays (who do allow continued subscriptions into their fixed rate ISAs) only give 30 days for transferring in. Some providers also only accept transfer-in requests at the time of account opening.

sorethumbs1992 said:

And secondly (if previous point is allowed)
If I find that when my current ISA matures in Aug there is an ISA rate better than the one I have opened for upcoming 24/25 already - Am I allowed to open a second ISA solely as somewhere to move my matured one (and to not add anything new)

Yes, you can do. It's worth noting that the rule which currently restricts you to only paying new subscriptions from the current tax year into one of each type of ISA is actually being removed on 6th April this year, which will give more flexibility in what you can and can't do with new subscriptions.  

sorethumbs1992 said:

And lastly - my 23/24 ISA pays back in to the same account when it matures as and end of term figure.  That figure will of course be above the 20K so can the whole amount be transferred to an ISA solely for a better rate - or do I have to trim it down and withdraw the interest earned this year so as to be able to transfer the max of 20K

Yes, you don't need to withdraw the interest and can transfer the whole lot. The £20k ISA limit only applies to paying new money in and transfers of ISAs containing subscriptions from previous tax years don't count towards that limit. 
 

sorethumbs1992

refluxer said:

sorethumbs1992 said:

If I open a 24/25 ISA in April and find a decent rate for the coming year am I right that I can transfer in the pot from this year (if transfers are allowed) after it matures in August.  So I can then earn better interest on the matured account and whatever I add myself towards the 24/25 allowance?

Whether you can do this will depend on the type of ISA you choose. If you open an easy access cash ISA with a provider who accept transfers-in, then you would usually be free to transfer in a maturing ISA any time you like.

If you choose a fixed rate ISA, then these normally have a limited funding window (usually anything up to a month), in which case this wouldn't be possible with a 4 month gap. There are a few exceptions to this but even Barclays (who do allow continued subscriptions into their fixed rate ISAs) only give 30 days for transferring in. Some providers also only accept transfer-in requests at the time of account opening.

sorethumbs1992 said:

And secondly (if previous point is allowed)
If I find that when my current ISA matures in Aug there is an ISA rate better than the one I have opened for upcoming 24/25 already - Am I allowed to open a second ISA solely as somewhere to move my matured one (and to not add anything new)

Yes, you can do. It's worth noting that the rule which currently restricts you to only paying new subscriptions from the current tax year into one of each type of ISA is actually being removed on 6th April this year, which will give more flexibility in what you can and can't do with new subscriptions.  

sorethumbs1992 said:

And lastly - my 23/24 ISA pays back in to the same account when it matures as and end of term figure.  That figure will of course be above the 20K so can the whole amount be transferred to an ISA solely for a better rate - or do I have to trim it down and withdraw the interest earned this year so as to be able to transfer the max of 20K

Yes, you don't need to withdraw the interest and can transfer the whole lot. The £20k ISA limit only applies to paying new money in and transfers of ISAs containing subscriptions from previous tax years don't count towards that limit. 
 

Many thanks for taking the time to reply.
There are many similar questions in different posts but sometimes slightly different scenarios so I appreciate your reply.
Useful to know about that limited funding window and that I might miss that after 4 months, but handy to know I can still move a low interest expired ISA in to a completely new one without any issues (along with any growth paid in at maturity).

I opted for the fixed rate/interest paid at maturity option.  I also see (I think) some that pay monthly interest in to a separate bank account option.

Am I right in thinking that its probably more prudent to choose an ISA that pays interest back in to the ISA at maturity and therefore has a larger balance to be able to transfer as a whole ISA in the future?
As opposed to one that pays interest monthly to a separate account and therefore only has the balance of whatever was paid in and at maturity can only transfer that.

refluxer

Having monthly interest paid away is a good option if you need it as income. If you don't, then retaining the interest within the ISA and letting it grow year after year is the better option. You'll also achieve the stated AER for the account by doing this, rather than the (lower) gross rate.

It's worth noting that certain banks like Barclays only allow monthly interest to be paid away so you need to select annual interest if you want it paid into the same ISA. As always, reading the T&C's carefully is essential to avoid making mistakes.

sorethumbs1992

@refluxer
Thanks very much.  It's something I would like to build so a better rate and the ability to transfer that growth is the plan I'd like to try and achieve.