Question maturing fixed rate ISA

Andy989

Hi All,

I’ve got a Santander Fixed Rate ISA maturing soon and received a message that it will be automatically transferred to an Everyday Saver.

I thought that it would automatically be transferred to another ISA (although lower rate) and it was possible to accumulate the tax free savings in ISAs each year (i.e. after 2 yrs one could have 40,000 in ISA accounts)?

I have already opened an ISA used this years ISA allowance so can’t invest the money in that.

How does one accumulate cash in ISAs if that is possible?

Albermarle

Andy989 said:

Hi All,

I’ve got a Santander Fixed Rate ISA maturing soon and received a message that it will be automatically transferred to an Everyday Saver.

I thought that it would automatically be transferred to another ISA (although lower rate) and it was possible to accumulate the tax free savings in ISAs each year (i.e. after 2 yrs one could have 40,000 in ISA accounts)?

I have already opened an ISA used this years ISA allowance so can’t invest the money in that.

How does one accumulate cash in ISAs if that is possible?

Yes that is unusual, are you sure that it is not an Everyday Saver ISA? 

Also Fixed Term ISA's are normally only automatically put it into another ISA account, if you do not make a positive choice. They normally contact you about 3 weeks before the end of the term with various options. Have they done that ?

refluxer

I've got a Santander fixed rate cash ISA that matures later this year and this is what happens at maturity...

At the end of term

We’ll calculate and pay the interest for you on the date of maturity and it will be available to you from the following day. You can choose your maturity options up to 28 days before the account matures. If we don’t hear from you, we’ll transfer your account to an ISA Saver.

...so the automatic option (if they don't hear from you) is to automatically transfer it into an easy access cash ISA. While paying out into a non-ISA account will be an option, they'll only do this if you tell them to so as you don't want that to happen, just make sure you submit the correct maturity instructions.

You'll have the option to transfer to another fixed rate cash ISA with Santander but if you want a better rate elsewhere, my advice would be to let it mature into the ISA Saver and arrange the transfer from there with your new provider. Just don't let it sit in the ISA Saver for any longer than necessary, as it'll most-likely be on a very low rate.