Cash ISA tactics for the new tax year ?

sparkiemalarkie

With talk of interest rate rises I'm just wondering what others are doing regarding their 2026-27 cash ISA deposits.
I was thinking of depositing in a flexible ISA and, if there is a significant rate rise, I would transfer the cash to the higher rate account.

Now , if there was a higher rate account that didn't allow transfers in, would I be able to withdraw the cash from the flexible ISA and then would it be treated as 'new' money?

sx

masonic

Yes, you could do this, but limiting yourself to a flexible ISA now will immediately compromise the best rate available to you. It might not make the most sense to accept a lower rate now in the hope of obtaining a better rate later. There will always be a flexible ISA that accepts transfers in if needed.

Vitor

 if there was a higher rate account that didn't allow transfers in, would I be able to withdraw the cash from the flexible ISA and then would it be treated as 'new' money?

Yes, that money is 'new' and so the deposit would count against the £20k annual limit.

Woodstok2000

https://forums.moneysavingexpert.com/discussion/6661711/cash-isa-tactics-for-the-new-tax-year

If you withdraw from a flexible isa, you can deposit that amount back into any isa (flexible or not) in the same tax year without impacting your annual allowance.

If you withdraw from previous tax years, it has to go back into the same ISA.

slinger2

https://forums.moneysavingexpert.com/discussion/6661711/cash-isa-tactics-for-the-new-tax-year

My first thought is to see whether Shawbrook will let me add to my existing Cash ISA with them. If so I'll probably add most of my £20k to that (when it becomes available).

nottsphil

https://forums.moneysavingexpert.com/discussion/comment/81941295#Comment_81941295

Does that last bit also apply to interest earned and paid from those current year subscriptions, ie could I withdraw/'borrow' interest now from my flexible ISA and return it to the account maybe next March and not have it count as new money?

masonic

https://forums.moneysavingexpert.com/discussion/comment/81942323#Comment_81942323

You can withdraw down to zero if you like (and provider will let you). What you withdraw is, in effect, added on to your available allowance. This can take it above £20k. Where it ends up at the end of the tax year determines how much net allowance you have used. Interest is treated like previous years' subscriptions.

refluxer

https://forums.moneysavingexpert.com/discussion/comment/81941695#Comment_81941695

Yes, that is allowed according to Shawbrook's fixed rate cash ISA T&Cs so you can pay your new subscriptions into it in the usual way (no need to contact them about it).

I've done this myself during this tax year (for a fixed rate ISA I took out during the previous tax year) and may consider doing it again using next year's ISA allowance, depending on what the interest rate outlook is at the time.

SFCooper

Withdraw £20k from Chip Cash ISA on 05/04

Deposit £20k into Prosper Cash ISA on 06/04

nottsphil

https://forums.moneysavingexpert.com/discussion/comment/81943696#Comment_81943696

I don't know who you are advising but why would you delay the deposit into Prosper and therefore use up the whole of next year's allowance? If it's because Chip's isn't flexible, then what's the point of withdrawing it the previous day?

steveksullivan

https://forums.moneysavingexpert.com/discussion/comment/81943209#Comment_81943209

I've been round this question several times with Shawbrook in previous years and each time they've confirmed they will do this AT THEIR DISCRETION (cant remember the exact wording) - and I've always guessed they would refuse it if interest rates were going downwards, as they were before the current 'unpleasantness'. Can I ask did you do the transfer very early in the year? I too would like to do this for 26/27 - Thanks!