Transferring a cash ISA from one provider to a another offering a fixed ISA with better rate

c4bosh

Hello,

I have an instant access cash ISA with a poor rate and am looking to transfer it to a new provider who is offering a good 1 year fixed rate ISA.
I've read that it's better to have the new provider handle the transfer. I tried to follow their online form, but got stumped when it asked where I wanted to pay the interest earned. I thought the interest just gets added to the pot? I'm unclear about where this interest is supposed to go.
Also, it asked this before I completed the form. No mention of how the provider requests the transfer. Should I transfer the interest to my regular bank account, which is a different provider?

surreysaver

You often have a choice of either paying the interest into the account so that it can compound, or paying it out of the ISA to somewhere else, such as a current account (if you've a large balance some people do this to provide additional income).

Do not do the transfer yourself, this loses the ISA status. The provider you've opened a new ISA with handles the transfer. They contact your existing provider to transfer the money.

t0rt0ise

It's essential that you use the new provider to transfer the ISA. Presumably you opened an account with the new provider and said that you want to transfer in. It will ask you for your current ISAs details and that's it. You may get the choice of having the interest go into that new account or your normal current account Just tick the option for this new account.