ISA advice please

richpoortyke

Just a couple of quick questions if anyone can help please. Firstly I have an ISA with a low rate that runs til July. I lose the interest if I withdraw from this ISA. Firstly when it runs out it puts me on an even lower rate. If it does this will that use up my allowance for the new year when it moves it? Secondly after reading up on ISAs the fixed rate ones which I was looking at seem to indicate they aren't suitable to add regular deposits to. Is there a reason for this? Should I be looking at variable ones again and then having a taxable savings account for my regular deposits? Thanks for any help

Woodstok2000

1. No, your fixed isa changing to a regular isa when it matures has no impact on your annual allowance. You can also do an isa transfer to move this money to a better isa without impacting your allowance.
2. Most fixed isas are set for a specific period where you cant add to the money. Banks want to lock in their risk - imagine a scenario where you took a 5 year 5% fixed, and interest rates crash. If further deposits were allowed then it could cost the bank a fortune. If you want to make regular deposits, you probably need a variable isa.

GrubbyGirl_2

If the interest rate is very low it may be worth you paying the penalty to do the transfer out. You need to do the calculations