Transferring isa before interest is paid

likahey

I have recently opened a cash isa with moneybox which pays interest yearly. I would like to transfer the isa to a different provider when the interest rate of it drops in 3 months. If I transfer it will the interest be transferred as well or do I need to keep it open with a little bit of money and then transfer the rest at the end of the year when the interest is paid?

slinger2

Generally when you do a full transfer the interest due will be added and the account closed. If you do a partial transfer the account will remain open.

likahey

slinger2 said:

Generally when you do a full transfer the interest due will be added and the account closed. If you do a partial transfer the account will remain open.

Thank you! 

Qyburn

Be careful if the new provider asks for the value to transfer, even for a full transfer. That happened to me going Virgin->Zopa. They insist on a figure and I made the mistake of putting in the current balance. That left the old account still open with zero balance until interest was paid.

slinger2

Qyburn said:

Be careful if the new provider asks for the value to transfer, even for a full transfer. That happened to me going Virgin->Zopa. They insist on a figure and I made the mistake of putting in the current balance. That left the old account still open with zero balance until interest was paid.

My general impression is that, for a full transfer, you do put in the current balance and the current provider adds the interest and closes the account. Obviously this is not universal. I've very recently transferred out of Zopa. They added on the pending interest (£50, part of a month) before sending to the new provider. However Zopa didn't close the account, they just left a zero balance, presumably with no pending interest.

surreysaver

There's normally a box to tick to say you want to do a full closure as part of the transfer process 

Qyburn

slinger2 said:

I've very recently transferred out of Zopa. They added on the pending interest (£50, part of a month) before sending to the new provider. However Zopa didn't close the account, they just left a zero balance, presumably with no pending interest.

Zopa's a bit different in that the ISA "pot" is embedded in the general "Smart Savings Hub" with no descrete account number.