Fixed Rate ISA Maturing

jfawalter

I have a two-year fixed rate ISA with Virgin Money that matures on 24th December 2024. They are offering to reinvest the money into either a new 1 year Fixed Rate ISA, a new 2 year Fixed Rate ISA, an easy access Cash ISA, or a non-ISA account, with the easy access Cash ISA being the default option. In this tax year, I have already used my full ISA allowance to buy a 1 year Fixed Rate ISA with Beehive Money, which matures in January 2026 and they won't access any transfer in because the funding window has closed. When my Fixed Rate ISA with Virgin matures in a few weeks what would you recommend that I do with the money, as the easy access Cash ISA that they are offering me only pays 1.25% however given that I've already opened an ISA in this tax year with another provider what choice do I have? Thanks for any advice.

mebu60

Let the funds move into the VM EA Cash ISA. Open a better paying Cash ISA that permits transfers-in. Instruct the new provider to transfer-in the funds from the VM EA Cash ISA. 

The annual £20k allowance relates solely to new money paid in in the tax year so does not apply here. You will not need to pay any new cash into the new better paying Cash ISA. Just ensure that it accepts transfers-in and ensure you instruct the new provider to progress the transfer. The relevant questions will come up during the application process. 

Albermarle

Suggest some time reading through the forum would be beneficial for your ISA knowledge.
There are lots of threads about fixed rate bonds finishing, ISA transfers, opening multiple ISA's etc

peter021072

jfawalter said:

I have a two-year fixed rate ISA with Virgin Money that matures on 24th December 2024. They are offering to reinvest the money into either a new 1 year Fixed Rate ISA, a new 2 year Fixed Rate ISA, an easy access Cash ISA, or a non-ISA account, with the easy access Cash ISA being the default option. In this tax year, I have already used my full ISA allowance to buy a 1 year Fixed Rate ISA with Beehive Money, which matures in January 2026 and they won't access any transfer in because the funding window has closed. When my Fixed Rate ISA with Virgin matures in a few weeks what would you recommend that I do with the money, as the easy access Cash ISA that they are offering me only pays 1.25% however given that I've already opened an ISA in this tax year with another provider what choice do I have? Thanks for any advice.

Having used all your ISA allowance this year doesn't restrict your right to transfer existing ISAs to other better paying providers. 1.25% is a paltry figure which is less than inflation therefore the money would lose real value if you put it there. Transfer to a higher paying account. The procedure to do this is copied here from Best cash ISAs

If you want to transfer, don't withdraw your cash and transfer it manually. You'll lose all tax benefits if you do. Instead, speak to the new provider and fill in an ISA transfer form. Your new provider will then move the money over for you – keeping your ISA cash permanently tax-free. We make it clear which providers don't allow transfers in our table below.

t0rt0ise

If you know what you want to do there's no need to let it transfer to an easy access first. I have the same ISA maturing on the same date. I have already opted to accept their offer of the one year fixed ISA and it will transfer to it on that day. Interest rate of 4.52 seemed to be the best fixed rate I could see. It says it will mature on 24 January 2026 so 13 months rather than the year.