Maturing ISAs

c22x

Looking for advice from those who have experience of ISAs maturing. In March 2024, I used my full allowance, and then the same from April 2024 in the next tax year. They both mature within a month of one another and the bank has offered me an option for the first one. I wonder what advice people have about this, as I'm looking to put it away for 1 year fixed rate. I also have an amount in savings to put into a new ISA from the 2025 tax year. 

Should I try to combine all three in a fixed rate? Or keep them separately? I wonder if there's anything I'm missing. I know not to withdraw any from the ISA wrapper...

mebu60

What rate is the bank offering for fixing the first maturing ISA versus what you could get elsewhere? If you open one elsewhere ensure that it accepts transfers-in. You will then instruct the new provider to action the transfer-in during the application process. You will not need to add new money to open the ISA. 

Given the current downward trajectory on rates you are likely better to fix each one individually at the earliest opportunity than wait until after 6 April to combine them. The next BoE rate meeting is on 20 March. The least likely outcome from that currently would be a rate hike. 

c22x

Thank you @mebu60; really appreciate your reply. It's offering a loyalty rate at 4.3% that I have signed up for but have until the maturity date to change my mind. Good idea to think about fixing separately because of the rates. I'd wondered if there might be some more fluctuation in them when ISA season starts in the new financial year, too. I also can't work out if the more that's in one ISA, the more interest I'll get (like compound interest), but I'm no economist! 

mebu60

If you had three separate ISAs or one with the combined amount in, if they had the same AER you would get the same amount of interest over the same time period.

If you lock in a higher AER to fix the first maturing ISA than you get with the subsequent maturity and/or the new 25/26 tax year fix then you will earn more interest. 

4.3% is not a disaster if you're happy with the convenience of staying where you are. Coventry currently offering 4.5% for 15 months but I don't know the funding window and whether that would extend past your maturity date. 

badger09

The new Coventry Centrepoint FRISA has a 14 days funding window. So any  ISA xfer in must be initiated within 14 days of opening. (Mine was opened immediately). I can’t see any time scale for xferred funds to arrive so I’d be tempted to xfer them both.