Fixed Rate cash ISA maturing - confusion about options

Mayeve

Hello

I’ve had a look through a few FR ISA threads here but not found the information I need.

Last year I opened a 1 year FR cash ISA with NatWest, which matures in September. The information they have sent me states that it will automatically become an easy access ISA on maturity, or can become another Fixed Rate ISA with them, or can transfer to an ISA elsewhere. 

In April this year I opened a new 1 year FR cash ISA with Kent Reliance, using up the full allowance for this tax year. Their policy only allows a transfer in within 30 days of opening that account, but anyway I don’t want to have more money locked into any Fixed Rate account this tax year, I want to be able to access the money if necessary. 

I don't want the maturing ISA to become NatWest Easy Access ISA because the interest is very low. Am I right in thinking that I can’t open an easy access cash ISA elsewhere this year to transfer the NatWest ISA into it, because  already used the full allowance in the Kent Reliance account?

Is my only other option to move the matured ISA into a standard savings account? I’d get more interest, but will then be liable to pay tax on interest. 

It seems wrong that I should either have to stick with NatWest and the low interest account, or else effectively close the 2023 ISA altogether and only be left with the new 2024 Kent Reliance one, and so lose the advantages of more of my savings being tax free. 

I am so confused, it’s given me a headache! 

Thanks in advance for any info you can offer.

badger09

Mayeve said:

Hello

I’ve had a look through a few FR ISA threads here but not found the information I need.

Last year I opened a 1 year FR cash ISA with NatWest, which matures in September. The information they have sent me states that it will automatically become an easy access ISA on maturity, or can become another Fixed Rate ISA with them, or can transfer to an ISA elsewhere. 

In April this year I opened a new 1 year FR cash ISA with Kent Reliance, using up the full allowance for this tax year. Their policy only allows a transfer in within 30 days of opening that account, but anyway I don’t want to have more money locked into any Fixed Rate account this tax year, I want to be able to access the money if necessary. 

I don't want the maturing ISA to become NatWest Easy Access ISA because the interest is very low. Am I right in thinking that I can’t open an easy access cash ISA elsewhere this year to transfer the NatWest ISA into it, because  already used the full allowance in the Kent Reliance account?

Is my only other option to move the matured ISA into a standard savings account? I’d get more interest, but will then be liable to pay tax on interest. 

It seems wrong that I should either have to stick with NatWest and the low interest account, or else effectively close the 2023 ISA altogether and only be left with the new 2024 Kent Reliance one, and so lose the advantages of more of my savings being tax free. 

I am so confused, it’s given me a headache! 

Thanks in advance for any info you can offer.

BIB
No, you’re not right in thinking that. 

You can indeed open another cash ISA elsewhere and ask the new provider to transfer your soon to mature NatWest ISA. When you complete the transfer request, you’ll be given the option to transfer immediately, or wait until maturity. If you want to open the new EA ISA now, just make sure you tick the right box. 

Mayeve

badger09 said:

Mayeve said:

Hello

I’ve had a look through a few FR ISA threads here but not found the information I need.

Last year I opened a 1 year FR cash ISA with NatWest, which matures in September. The information they have sent me states that it will automatically become an easy access ISA on maturity, or can become another Fixed Rate ISA with them, or can transfer to an ISA elsewhere. 

In April this year I opened a new 1 year FR cash ISA with Kent Reliance, using up the full allowance for this tax year. Their policy only allows a transfer in within 30 days of opening that account, but anyway I don’t want to have more money locked into any Fixed Rate account this tax year, I want to be able to access the money if necessary. 

I don't want the maturing ISA to become NatWest Easy Access ISA because the interest is very low. Am I right in thinking that I can’t open an easy access cash ISA elsewhere this year to transfer the NatWest ISA into it, because  already used the full allowance in the Kent Reliance account?

Is my only other option to move the matured ISA into a standard savings account? I’d get more interest, but will then be liable to pay tax on interest. 

It seems wrong that I should either have to stick with NatWest and the low interest account, or else effectively close the 2023 ISA altogether and only be left with the new 2024 Kent Reliance one, and so lose the advantages of more of my savings being tax free. 

I am so confused, it’s given me a headache! 

Thanks in advance for any info you can offer.

BIB
No, you’re not right in thinking that. 

You can indeed open another cash ISA elsewhere and ask the new provider to transfer your soon to mature NatWest ISA. When you complete the transfer request, you’ll be given the option to transfer immediately, or wait until maturity. If you want to open the new EA ISA now, just make sure you tick the right box. 

Thank you, badger09. I was almost regretting opening a new FR ISA this tax year, thinking it had hampered my options on what to do with the maturing ISA. 

elkiedee

As @badger09 says, you can open a new ISA account at a better rate than the NatWest one - you need to make sure your choice of ISA accepts transfers. You can't put new savings into your ISA in this cash year but you can transfer savings which are already in one - you need to ask the new provider to transfer your money from NatWest into your new account.

Mayeve

elkiedee said:

As @badger09 says, you can open a new ISA account at a better rate than the NatWest one - you need to make sure your choice of ISA accepts transfers. You can't put new savings into your ISA in this cash year but you can transfer savings which are already in one - you need to ask the new provider to transfer your money from NatWest into your new account.

Thank you, elkidee. I started looking at some prospective accounts and as you say, some don’t accept transfers in.  Then via MSE info on the latest best cash ISA accounts I’ve found Cynergy and will probably go with them.