Transferring isa to another bank at end of fixed rate term

Greenstar62

I have a fixed rate isa with Santander due to end on 1.11.24. I want to transfer it into a variable rate isa with Cynergy that I opened earlier this year.

How can I do this without incurring a 120 day interest penalty but without losing the Isa tax-free status?

maman

You should soon receive a letter from Santander telling you of your options when the ISA matures which includes transferring to another provider and the date you can action this without losing the interest.

Until then, you just have to hope the Cynergy product is still available. 

lohr500

You need to initiate the "Transfer In" with Cynergy. 
This assumes the Cynergy ISA will allow transfers In from previous tax years.

Some ISA providers will allow you to enter a future transfer date into the Transfer In request. Others won't.  
I'm not sure if Cynergy will allow you to enter a future transfer date.

If they do, then complete the Transfer In request with an effective date of 01/11/24.

If they don't, then DO NOT initiate the transfer now as you will get hit with the Santander early withdrawal penalty. 
Wait until the Santander ISA matures, then initiate the transfer.

If they haven't done so already, Santander should send you a message advising that the fixed ISA is due to mature and what they will do with it by default. The tax free status will be preserved as usually it will move into a default easy access ISA, but I think some ISA providers roll it into another fixed term unless you instruct them otherwise. So it is important to study what Santander say in their maturity message and if there is an option of rolling into another fix or moving to easy access you need to tell them you want it moving to easy access.

35har1old

Greenstar62 said:

I have a fixed rate isa with Santander due to end on 1.11.24. I want to transfer it into a variable rate isa with Cynergy that I opened earlier this year.

How can I do this without incurring a 120 day interest penalty but without losing the Isa tax-free status?

Can you still transfer online with Cynergy as most want the transfer request setup at opening you might find that it will require a paper transfer submitted 

refluxer

Fixed rate Santander ISAs tend to mature into an easy access 'ISA Saver' on maturity by default, if you don't submit maturity instructions (but do check your own account T&Cs just to be sure).

I let mine mature recently (without submitting instructions), then opened a Cynergy fixed rate ISA and requested the transfer during the account application process. The money was transferred (electronically) from the ISA Saver into the Cynergy ISA two working days later.

As mine had already matured, I was able to request an immediate transfer but, IIRC, the earliest I would have been able to arrange one with Cynergy was two weeks before the maturity date.

Arranging a transfer in advance is useful when transferring to a fixed rate and you're concerned the rate will drop in the meantime but there isn't much benefit to doing so in your case. 

One other thing to bear in mind is that Santander add the interest to their fixed rate ISAs the day after maturity, so I wouldn't arrange a transfer in advance to be carried out on the actual maturity date.

TLDR : the safest way to proceed would be to request the transfer once the Santander ISA has defaulted to an ISA Saver and the interest has actually been added. I'm pretty sure Cynergy backdated the interest to the date of application (the date I requested the transfer), so you might not even lose out on interest while it's sitting in the ISA Saver.

ScarletBea

I recently did an ISA transfer to Cynergy and they do let you set up a future date, when the old ISA matures, but it has to be within 30 days.
Since your old ISA matures in the next couple of weeks, you can go ahead and open the Cynergy account now.