Moving my ISA

mr_harris

Hi All

I have an Cash ISA the interest rate has gone down to 2% and the next interest payout is September this year, would I be better moving it to a new bank with a higher interest rate before the new Tax year as I have yet to put any extra money this this tax year. kind regards

Stubod

https://www.moneysavingexpert.com/savings/best-cash-isa/

..there are plenty of better rates out there!!

flaneurs_lobster

What is the penalty for transferring the ISA to another institution?

Plug the numbers into the MSE calculator to see if a transfer makes sense.

https://www.moneysavingexpert.com/savings/isa-switch-calc/

jimjames

mr_harris said:

Hi All

I have an Cash ISA the interest rate has gone down to 2% and the next interest payout is September this year, would I be better moving it to a new bank with a higher interest rate before the new Tax year as I have yet to put any extra money this this tax year. kind regards

Makes no difference when you move it in relation to tax years. But best to move it asap to get the benefit of a better interest rate that should be at least double the 2%

artyboy

flaneurs_lobster said:

What is the penalty for transferring the ISA to another institution?

Plug the numbers into the MSE calculator to see if a transfer makes sense.

https://www.moneysavingexpert.com/savings/isa-switch-calc/

If the interest rate has just gone down to 2%, that suggests it's not a fixed term ISA with exit penalties.

Definitely cut and run time!

kimwp

Remember to transfer it rather than take the money out.

flaneurs_lobster

artyboy said:

flaneurs_lobster said:

What is the penalty for transferring the ISA to another institution?

Plug the numbers into the MSE calculator to see if a transfer makes sense.

https://www.moneysavingexpert.com/savings/isa-switch-calc/

If the interest rate has just gone down to 2%, that suggests it's not a fixed term ISA with exit penalties.

Definitely cut and run time!

Very good point. 

MEM62

jimjames said:

mr_harris said:

Hi All

I have an Cash ISA the interest rate has gone down to 2% and the next interest payout is September this year, would I be better moving it to a new bank with a higher interest rate before the new Tax year as I have yet to put any extra money this this tax year. kind regards

Makes no difference when you move it in relation to tax years. But best to move it asap to get the benefit of a better interest rate that should be at least double the 2%

Absolutely this

mr_harris

kimwp said:

Remember to transfer it rather than take the money out.

Sorry to sound daft just wondering the reason behind this.

eskbanker

mr_harris said:

kimwp said:

Remember to transfer it rather than take the money out.

Sorry to sound daft just wondering the reason behind this.

If you take it out and pay it in again then it would count towards this year's £20K annual ISA contribution allowance, whereas transferring would leave your current year allowance unaffected.  It may not matter, depending on how much is in the ISA and how much more you have paid (or will pay) in this year....

mebu60

mr_harris said:

kimwp said:

Remember to transfer it rather than take the money out.

Sorry to sound daft just wondering the reason behind this.

I would add that the transfer is done by the new provider. Check that they accept transfers-in. They will ask the relevant questions about your current provider during the application process.