Help with Cash ISA's

Acesfan

I'm looking at opening a cash ISA before the end of the tax year 2024/25.
It pays around 4.5% but the advice says it actually pays around 1.5% with a 3% bonus for the first year.   So the advice says it will have to be moved after a year.

My question is, I know I can put £20k into the cash ISA.    And £20k into another ISA next tax year.
But the original £20k will also need to be moved next year, so next year I could be putting £20k into a new ISA, and also putting this existing £20K+interest into a new ISA too.
So it would look like I'm opening £40k of ISAs next year.... Is this OK?   How does it work when £20k is the limit?

FrugaiMacDugal

You can only put £20k 'new' money into an ISA each tax year, so when you move your 24/25 balance plus interest it will be 'old' money.

If you want to transfer, never withdraw money from a cash ISA! You'll immediately lose all the lasting tax benefits.

Instead, speak to the new provider and fill in an ISA transfer form. Your new provider should then sort it all out, including moving the money over for you – keeping your ISA cash permanently tax-free.

Albermarle

Suggest you spend some time reading through the forum, where similar questions about ISA transfers etc are asked and answered  regularly.

Acesfan

Albermarle said:

Suggest you spend some time reading through the forum, where similar questions about ISA transfers etc are asked and answered  regularly.

It's OK.  I got the answer I needed above.

sammy_zammy

You don’t need to open a new ISA to deposit £20k next year (I assume it’s easy access due to the existence of a bonus rate). You can just put it in the ISA you open this year, then initiate the transfer process on the whole balance whenever you’re ready.