Basic question on Cash ISA after maturity dates

RR2023

Hi. Can someone please help with what might be a basic question for some! My Santander cash ISA for 23/24 has matured and they have given me the option of upgrading it to a Fixed Rate Cash Isa at 4.15%. But I know there are higher rates out there for tax year 24/25 - plus I want to invest  £20,000 for this tax year 24/25 in an ISA too.

My confusion is: if I transfer the matured amount to the upgraded Santander Fixed Rate Cash Isa, can I then add this year's (24/25) allowance to that amount too in that same Cash Isa? But if I want a higher rate Cash ISA (which I have seen there are), I know I can open one with a new provider - but then what do I do with 23/24 amount? Would I bring that amount over to the new provider or do I leave it in the 23/24 Santander Cash ISA account (that pays a low 1.5%). I am assuming that if I transfer the 23/24 cash amount into a new provider, I am only paid interest on the 24/25 amount and not the combined 23/24 and 24/25 amount?

I am very confused how this works! Anyone?

refluxer

If you want to take out another fixed rate cash iSA at a higher rate than Santander is currently offering, then you can open a new ISA elsewhere, pay in your 2024-25 allowance as a new subscription and you can also transfer in the existing Santander ISA if you want to, if the new ISA provider accepts transfers in (most do but you need to read the account T&C's to be sure)

Just make sure you keep the current Santander ISA as easy access - don't transfer it to another fixed rate ISA with Santander in the meantime otherwise you'd need to pay a penalty to transfer out before the maturity date.

Interest in a cash ISA will always be paid on the full balance - the fact that part of it might be from a previous tax year doesn't matter.

slinger2

They're just saving accounts. You get interest from a provider depending on much money is with them and the interest rate. You've got £20k of new money that can go into Cash ISAs this tax year. You can add it to the old savings account (as long as the provider allows it) or create a new one or create a new one and transfer the old one or split the new £20k into two new cash ISAs or ten new ISAs, etc.

badger09

@RR2023
When you have opened your new FRISA, complete the new provider’s transfer form &they will arrange the transfer from Santander. Don’t just move the money yourself!

Do you have £20k to save in an ISA immediately? If you don’t, you need to check how long you have to fund your new FRISA. 

You’ll have other options, but I won’t overcomplicate for you.