Can you transfer a fixed-rate ISA to an easy-access one before maturity?

paul_liverpoolfc

Hi,

This might sound like a weird question but I was wondering if you can transfer a fixed-rate ISA to an easy-access one before maturity.

I've currently got a really good rate of 5.7% with Virgin Money, which is giving me around £49 in interest each month. The ISA is due to mature in August.

I understand that I'd be penalised 60 days interest (so about £100) for transferring from my ISA but am I right in thinking I could pay in what I wanted each month with an easy-access ISA? 

Thanks

Paul

 

Kim_13

You could, but I don't see what you're looking to achieve that you couldn't accomplish without paying a penalty.

You say that it is a really good rate, which it is, so why lose it before you have to? EA rates may well fall further by August and are currently below the 5.7% as well as incurring you said penalty.

It's perfectly fine to open a new Easy Access ISA for this tax year in order to enable you to use your new £20,000 allowance. You can then transfer in your Virgin fixed ISA on maturity penalty free, or open another ISA elsewhere and transfer it there at that time.

In summary, given the rate you have vs what is available now, it would make no sense to transfer unless you unavoidably need access to some of the capital (in which case check to see if you can transfer only what you need access to, so that you don't pay a higher penalty than you need to.) 

Veteransaver

Why not just open a new easy access ISA now, as we have just started a new tax year. Then you could transfer your Virgin one to it at maturity. Without having to pay the penalty, and you won't get 5.7% now either so you are better off leaving it there until its August maturity.

kuepper

There's a calculator for it that might help you decide https://www.moneysavingexpert.com/savings/isa-switch-calc/

Beddie

Just open a new ISA! As it's the new tax year you have another £20k allowance. Don't come out of that great fixed rate early, that's not sensible at all.