Transfer Cash Easy Access ISA to higher rate of interest

Walkinthewoods

Is there a restriction on the amount of times I can switch/transfer provider?

Mark_d

No there isn't

Alexland

Walkinthewoods said:

Is there a restriction on the amount of times I can switch/transfer provider?

The main limitation is how much you can be bothered to do the paperwork.

I have found it's easier to just have a small cash savings account for money I might need immediate / emergency access to with the rest of my rainy day pot held in a money market fund in a S&S ISA which gives me a rate of return comparable to if I kept moving a Cash ISA around without the hassle accepting a tiny amount of risk and that it would take a few days to get access to the money.

soulsaver

Alexland said:

Walkinthewoods said:

Is there a restriction on the amount of times I can switch/transfer provider?

The main limitation is how much you can be bothered to do the paperwork.

I have found it's easier to just have a small cash savings account for money I might need immediate / emergency access to with the rest of my rainy day pot held in a money market fund in a S&S ISA which gives me a rate of return comparable to if I kept moving a Cash ISA around without the hassle accepting a tiny amount of risk and that it would take a few days to get access to the money.

...in a money market fund that pays...what rate?

Alexland

soulsaver said:

...in a money market fund that pays...what rate?

Over the past 12 months Blackrock iShares ENRS has declared distributions of 2.60% in Dec 23 and 2.78% in Jun 24 before platform fees so similar to the 5.2% T212 rate. However I'm on a transfer cashback deal with Interactive Investor where they are paying me more than I am paying them over the 12 month period and after that, if there are no other transfer cashback deals, I will transfer it into my iWeb account so I guess there is still some hassle moving an ISA around but for cashback not interest rates!

It's an ETF but if you want the FSCS protection from fund manager failure there are similar OEIC funds from Royal London, Vanguard and Abrdn. It's not without risk of underlying asset failure.

soulsaver

Alexland said:

soulsaver said:

...in a money market fund that pays...what rate?

Over the past 12 months Blackrock iShares ENRS has declared distributions of 2.60% in Dec 23 and 2.78% in Jun 24 before platform fees so similar to the 5.2% T212 rate. However I'm on a transfer cashback deal with Interactive Investor where they are paying me more than I am paying them over the 12 month period and after that, if there are no other transfer cashback deals, I will transfer it into my iWeb account so I guess there is still some hassle moving an ISA around but for cashback not interest rates!

It's an ETF but if you want the FSCS protection from fund manager failure there are similar OEIC funds from Royal London, Vanguard and Abrdn. It's not without risk of underlying asset failure.

How is that expected to perform with reducing bank rates? Will it follow them down?

I know I'm being lazy here 'cos I could do my own research... but that doesn't help anyone else interested - so help appreciated.

Alexland

soulsaver said:

How is that expected to perform with reducing bank rates? Will it follow them down?

Yes being short term bonds close to redemption the fund manager will need to keep replenishing the fund with more bonds close to redemption that will be priced relative to the risk free cash rate.

If you bought into a bond fund that had a longer average duration then it would mostly lock in the rate as the portfolio would be subject to a lower rate of turnover however then you start accepting price volatility as the bond valuations would increase with lowering rates and decrease with increasing rates. The longer the duration the more interest rate sensitive the price.