Opening 2 cash isa's and moving money between them....

VXman

I have opened a fixed rate isa with Shawbrook to obtain 5% rate before it was discontinued. I put £1000 in it for now but don't want to tie up the other 19K at the moment. 

Is it OK to open a Trading 212 flexible cash isa, currently at 5.2%, withdraw and deposit it in Shawbrook later this financial year when I am ready to commit?

slinger2

No. That's no longer allowed. You'd have to do a "transfer".

Albermarle

slinger2 said:

No. That's no longer allowed. You'd have to do a "transfer".

OP - Shawbrook are unusual in that they will accept new contributions during the fixed term ( rather than just after you open one) . However they will only accept transfers for sure when you first open the ISA fixed term. Any transfers later are at their discretion.

VXman

slinger2 said:

No. That's no longer allowed. You'd have to do a "transfer".

Really? So what would happen if i withdrew the cash from Trading 212 and then just paid cash into Shawbrook?

slinger2

VXman said:

slinger2 said:

No. That's no longer allowed. You'd have to do a "transfer".

Really? So what would happen if i withdrew the cash from Trading 212 and then just paid cash into Shawbrook?

You'd be breaking the rules. Whether you'd get caught I couldn't say. I've already broken the new rules, back in April before we all realised they'd changed them. Just hoping they'll be lenient this year, even if they do notice.

See: https://www.legislation.gov.uk/uksi/1998/1870/regulation/5DDB and compare the 2017 and 2024 versions. Paragraph (2) has disappeared and paragraph (3) now says "Any replacement subscription may be made only to the account from which the withdrawal of a cash amount it is replacing was made." Funny English but basically it says that the cash you withdraw can only be "replaced" into the same ISA it came from. Paying the money into Shawbrook would count as part of your £20k allowance.

masonic

VXman said:

slinger2 said:

No. That's no longer allowed. You'd have to do a "transfer".

Really? So what would happen if i withdrew the cash from Trading 212 and then just paid cash into Shawbrook?

Pay up to £9,500 into T212 you'd be fine, since £1,000 + £9,500 + £9,500 = £20,000. Above that you'd breach the annual allowance. Flexible withdrawals are only flexible if replaced in the same ISA. You'd end up with a maximum of £10,500 in Shawbrook.

GrubbyGirl_2

If you paid £1,000 into Shawbrook and £19,000 into T212 if you withdrew the £19,000 from T212 and paid it into Shawbrook you would have effectively paid £39,000 new money into and ISA this year,  The only way you can do it is to transfer it from T212 but Shawbrook would not take new transfers into a fixed account.

Maybe if you're not ready to commit it all you'd be better off putting the £19k into an ordinary savings account

Albermarle

GrubbyGirl_2 said:

If you paid £1,000 into Shawbrook and £19,000 into T212 if you withdrew the £19,000 from T212 and paid it into Shawbrook you would have effectively paid £39,000 new money into and ISA this year,  The only way you can do it is to transfer it from T212 but Shawbrook would not take new transfers into a fixed account.

Maybe if you're not ready to commit it all you'd be better off putting the £19k into an ordinary savings account

They might, it is at their discretion.
My guess is that if savings interest rates had stayed the same since the bond was opened, they probably would allow it. However if ( like recently ) rates have fallen a bit, they probably would not allow a transfer in.

GrubbyGirl_2

Albermarle said:

GrubbyGirl_2 said:

If you paid £1,000 into Shawbrook and £19,000 into T212 if you withdrew the £19,000 from T212 and paid it into Shawbrook you would have effectively paid £39,000 new money into and ISA this year,  The only way you can do it is to transfer it from T212 but Shawbrook would not take new transfers into a fixed account.

Maybe if you're not ready to commit it all you'd be better off putting the £19k into an ordinary savings account

They might, it is at their discretion.
My guess is that if savings interest rates had stayed the same since the bond was opened, they probably would allow it. However if ( like recently ) rates have fallen a bit, they probably would not allow a transfer in.

You're probably dead right there

VXman

GrubbyGirl_2 said:

If you paid £1,000 into Shawbrook and £19,000 into T212 if you withdrew the £19,000 from T212 and paid it into Shawbrook you would have effectively paid £39,000 new money into and ISA this year,  The only way you can do it is to transfer it from T212 but Shawbrook would not take new transfers into a fixed account.

Maybe if you're not ready to commit it all you'd be better off putting the £19k into an ordinary savings account

Thats where it is at the mo - Ulster loyalty savings getting around 5% but I'm likely to exceed the £1000 tax free limit so am trying to work out an alternative. Why all these silly rules!

slinger2

VXman said:

GrubbyGirl_2 said:

If you paid £1,000 into Shawbrook and £19,000 into T212 if you withdrew the £19,000 from T212 and paid it into Shawbrook you would have effectively paid £39,000 new money into and ISA this year,  The only way you can do it is to transfer it from T212 but Shawbrook would not take new transfers into a fixed account.

Maybe if you're not ready to commit it all you'd be better off putting the £19k into an ordinary savings account

Thats where it is at the mo - Ulster loyalty savings getting around 5% but I'm likely to exceed the £1000 tax free limit so am trying to work out an alternative. Why all these silly rules!

If it's a short-term issue you could get some of the interest paid next year (25/26) by going for annually paid. Doesn't help some of us since I'm certain to be the £1k next year too.