First ISA reaching maturity - please can you advise/clarify my options?

Just_A_Dad

Hello all,
My only ISA is reaching maturity in May. 
Its 13K and is currently on a rate 4.25%
Over the year I've also saved 1.7K ina regular savings account.
If I do nothing it goes to a 1.5% ISA rate, but says I can transfer to a another Fixed ISA with the bank (4.25%) for another 12 months.

Does this mean that if i place the 13K in the banks new ISA, that this 13K plus the approximate £580 interest come off of my 2025 20K allowance, meaning that for this tax year I can only open or add another 6420 tax free?

If thats the case, then the 6420 would become 4720 once I added my seperate 1700 savings?

If this is all yes, then would the smart thing to do is transfer into a 2 year fixed ISA, (which is 4.15% rather than the 1 year 4.25%) to then allow me to eventually have 2 ISA's which swap every other year to retain a good rate - rather then drop to these pitiful 1%'s?

Thanks in advance

Middle_of_the_Road

Just_A_Dad said:

Hello all,
My only ISA is reaching maturity in May. 
Its 13K and is currently on a rate 4.25%
Over the year I've also saved 1.7K ina regular savings account.
If I do nothing it goes to a 1.5% ISA rate, but says I can transfer to a another Fixed ISA with the bank (4.25%) for another 12 months.

Does this mean that if i place the 13K in the banks new ISA, that this 13K plus the approximate £580 interest come off of my 2025 20K allowance, meaning that for this tax year I can only open or add another 6420 tax free?

If thats the case, then the 6420 would become 4720 once I added my seperate 1700 savings?

If this is all yes, then would the smart thing to do is transfer into a 2 year fixed ISA, (which is 4.15% rather than the 1 year 4.25%) to then allow me to eventually have 2 ISA's which swap every other year to retain a good rate - rather then drop to these pitiful 1%'s?

Thanks in advance

Your 13k and interest doesn't reduce your following year deposit limit. So you can ask to transfer your existing ISA to a new one and deposit another 20k for this year.

slinger2

"Transfers" (within the ISA system) don't use up any of the annual allowance. So after your transfer you'll still have £20k left for this tax year (unless you've used some elsewhere). You can also transfer ISAs from one provider to another. And that doesn't use up any of your allowance either. If you do that make sure you use the formal transfer process.