Multiple Cash ISAs - unsure what to do.

palemist

I currently have 2 Cash ISAs open - Zopa, Trading 212 and Chip [all easy access CISA] Only the Zopa CISA is actively being funded and I've been paying regularly into it since December 2023. It now has £19000, I actually maxed it out before the 6th of April 2024 when the new rules kicked in, but I had to take out some money again in an emergency. I use the CASH ISAs for my emergency fund, I have a couple of other regular savings accounts with fixed rates.

With the new rules, I can open multiple ISAs of the same type with different providers. that's why I opened all 3, I'm aware that I can only have a maximum of £20K across all of them.

I opened the Trading 212 on the 24th of February 2024 and the Chip account was opened just before the start of FY 2024. 

Chip are now allowing transfers and they offer 5.10% compared to Zopa's 5.08%, I've used Chips's easy access savings account before and I like thier app. 

If I transfer the entire £19000 from Zopa to Chip, I'll have an allowance of just £1000 left to max out my Cash ISA for FY2024. 

I just need a fresh pair of kind eyes to look at my situation and offer suggestions to help me decide the best route to take. 

I don't want to spread the money across different CASH ISA providers because I'll get a better interest from the lump sum inside one ISA.

If I wanted to move the money over to Chip, is it better to withdraw the money from Zopa [5.08%] and deposit it into Chip [5.10%] or do it via the Cash ISA transfer route? I've heard Martin Lewis suggest that it's best to transfer but I don't know the reason why, plus transfers take time and the daily interest calculations are lost during the transfer? 

palemist

I can't see the edit button but after reading through, I realised that I didn't provide info on why I opened all 3 Cash ISAs. It was to eventually move to the one offering the highest interest, at the moment, it is Trading 212 so the question also applies to a scenario where I've decided to move my £19k from Zopa to Trading 212. Cheers. 

Catplan

You transfer so that you maintain the isa wrapper, otherwise you’d only be able to put 1k into the isa assume you’ve subscribed 19k this tax year.

currently your isa money is in Zopa, is that a flexible isa? You say you withdrew money from here, was it this tax year? If it was and it’s a flexible isa you can replace it without it impacting this year’s subscription but you need to do this before transferring.

palemist

Ah I see, thanks for your response. Yes, Zopa is flexible, so if I transfer to Chip [I don't really fancy Trading 212 for some reason]  after replacing the withdrawn amount, my ISA allowance is preserved, so I'll have room to contribute £21k plus into the pot.

 Many thanks @Catplan 👍

Catplan

So it might help if you post amounts, and dates, but it should be possible to replace anything withdrawn this tax year without it impacting this year’s subscription. If say you had 10k from previous year top up with 19k this year then withdrew 25k you can put 25k back in this tax year, but it must go into the isa you withdrew it from without it impacting this years subscription. So before you transfer,. So you could then add the remaining 1k for this year. 

Martico

palemist said:

I'm aware that I can only have a maximum of £20K across all of them.

 

No - you can only invest new money of up to £20k per year across all of them. You can hold more than that