What ISA post Chip bonus rate?

Oasis1

I used my 2025/26 ISA allowance to put 20k into Chip's ISA and now the rate is about to drop to 4.06%, so I'm looking for alternatives.

I already have a Trading 212 ISA at 4.3% so transferring the cash into there is an option. However, I'm looking at two other options with a fixed or much higher rate:

1. Cynergy Bank 4.35% 1 year fix - accepts transfers in
2. Plum 3.29% variable + 1yr 1.63% newbie bonus (4.92%) - but if cash is transferred in there is no bonus, making Cynergy the winner.

Chip appeals if I can get the bonus rate as I think it is likely to stay above Cynergy's 4.35% within the year. It's not flexible but allows 3 withdrawals before the rate drops. However, I can use my flexible Trading 212 ISA for withdrawals if emergency cash is needed.

As my Chip ISA is a flexible ISA, does it mean I can withdraw the £20k + interest, close the account, open the Plum ISA and then put £20k cash in without a transfer, and thus still get the bonus rate as I'm not transferring in?

slinger2

Oasis1 said:

As my Chip ISA is a flexible ISA, does it mean I can withdraw the £20k + interest, close the account, open the Plum ISA and then put £20k cash in without a transfer, and thus still get the bonus rate as I'm not transferring in?

Money withdrawn from a flexible ISA must be replaced into the same ISA, otherwise you'll have to use part of this year's £20k allowance if you put it elsewhere. It seems you've already used your allowance so that's not possible.

So the answer is: No.

Oasis1

slinger2 said:

Oasis1 said:

As my Chip ISA is a flexible ISA, does it mean I can withdraw the £20k + interest, close the account, open the Plum ISA and then put £20k cash in without a transfer, and thus still get the bonus rate as I'm not transferring in?

Money withdrawn from a flexible ISA must be replaced into the same ISA, otherwise you'll have to use part of this year's £20k allowance if you put it elsewhere. It seems you've already used your allowance so that's not possible.

So the answer is: No.

Thank you, that rules Plum out!

So to be clear - if I transferred the whole amount into my flexible Trading 212 ISA, I would maintain that flexibility to withdraw cash in and out whilst keeping my ISA allowance?

slinger2

If you do a "transfer" you don't use any of your annual allowance. That's true whether the ISAs are flexible or not. However your right to replace money is not transferred to the new ISA, so make sure your replace any withdrawn money before you do the transfer. After a transfer to a flexible ISA you'll be able to withdraw/replace like any other flexible ISA.

Oasis1

If I transferred the full Chip ISA to Cynergy, am I still able to flexibly withdraw/replace from my Trading 212 ISA? Bit confused how they keep track of allowances across different years when it comes to flexible ISAs...

slinger2

Yes, all your ISAs are independent of each other, so you can have as many flexible ISAs as you like, and you can  withdraw/replace from all/any of them.

Each provider keeps track of their own ISA, which shouldn't be too difficult because the withdrawal and replacement must be done in the same tax year. The slate is wiped clean at the start of each tax year, so any money withdrawn but not replaced is permanently lost from the ISA system at that time.