Chip Cash ISA transfer plan

LankyMoneySaver

Would appreciate people's feedback and suggestions on my plan for transferring away from Chip's Cash ISA now the interest rate has dropped to 1%.

1) Transfer Chip Cash ISA > Chip Smart ISA 3.75%
REASON:
Pending interest accrued but not yet paid on Cash ISA will be transferred.
Believe I'd lose this if transferring direct from the Cash ISA to another provider?

https://help.getchip.uk/help-article/changes-to-the-chip-cash-isa?abExternalOpen=true

You won't lose interest that has accrued but not yet been paid in the Chip Cash ISA when you transfer it to the Smart Cash ISA. Any pending interest that's accrued but has not yet been paid will be transferred over at the same time as your balance.

Then:

2) Open Trading 212 cash ISA
3.6%, but 4.51% on new money and 'deposited in the current tax year.'

3) Partial transfer this year's contribution (£15k) from chip smart ISA to T212 to earn increased interest on this, leaving previous year's contributions at higher 3.75% Chip.

https://www.moneysavingexpert.com/savings/best-cash-isa/#what

The bonus rate only applies to new money you pay in and transfers of cash deposited in the current tax year. If you transfer from another ISA which includes deposits from previous tax years, that 'older money' will only earn 3.6%.

4) Increase interest earned by withdrawing £5k from chip, then deposit as 'new money' in T212.

Obviously I'm using up this year's allowance up doing this. But I've got home improvements planned later this year so will be making withdrawals for that. So with T212 being flexible ISA I'll be able to make further contributions later in the tax year to replace that if I have money spare.

Questions:
Have I missed anything or can anyone see any issues wth this plan?

masonic

That should all work. But why stick with Chip at all when there are considerably better rates available for old money?

LankyMoneySaver

https://forums.moneysavingexpert.com/discussion/comment/82066505#Comment_82066505

Thanks for the suggestion. Haven't really looked at other options yet but will check the mse guide or if you've got any suggestions?

The planned home improvements mean I'm likely to withdraw some, or all, the old money later this year. So would ideally need penalty free withdrawals, even if I have to wait the full year for any interest earned for the part of the year.

LankyMoneySaver

https://forums.moneysavingexpert.com/discussion/comment/82066648#Comment_82066648

Looks like Marsden Building Society, 4.22% is the best option for the old money given these criteria.

masonic

https://forums.moneysavingexpert.com/discussion/comment/82066653#Comment_82066653

Yes, if you want ISA flexibility that looks to be the best offer right now for old money.

LankyMoneySaver

...Although does anyone with Marsden already know if the £5000 to open can be covered with an ISA transfer instead?

https://www.themarsden.co.uk/savings/online-savings-accounts/online-flexible-cash-isa-2

The minimum opening balance must be paid by Faster Payment within 48 hours of the account opening.