Advice concerning ISAs please.

anotherbob

Apologies in advance for my ignorance in the matter of ISAs.
I currently have 20K in one FRCA ISA which will mature on 28/10 this year. I want to reinvest the full amount into a new ISA with a different provider.
I will have additional funds amounting to approximately £12500 which I would like also to put in an ISA so the interest is tax-free.
My question is can I put all this (around £32.5K) in one new ISA, and if not how can I invest the funds in such a way that interest on them remains tax free?

Isthisforreal99

As long as the maturing £20k wasn't paid in this tax year then you can transfer it to another ISA and contribute up to £20k of new money from this years allowance but it's essential you do a transfer and not withdraw the original £20k to reinvest.

friolento

Good information to read: https://www.moneysavingexpert.com/savings/best-cash-isa/#needtoknows

marlot

As said, you must be careful not to withdraw the £20k. You are only allowed to add £20k a year, but there is nothing to stop you accumulating a much bigger ISA over time. And moving it between providers as you need to.

Open your new ISA, and ask your new provider to transfer your old ISA to them.

https://www.gov.uk/individual-savings-accounts/transferring-your-isa

https://moneyfactscompare.co.uk/isa/guides/how-do-isa-transfers-work/

LHW99

For this year, you can put in up to £20k of new money. From next April, if you are under 65, you will only be able to add £8k £12k to a cash ISA per financial year.

So you could open a new cash ISA in October, and ask that co. to transfer in the FRCA. Usually when you apply, there is a box somewhere on the form, where you can choose either to transfer immediately, or at the end of the fixed rate period.

Then you add the new money too.

[edited to correct brain slip!]

ColdIron

I'm sure you meant £12k

Section62

https://forums.moneysavingexpert.com/discussion/comment/82148465#Comment_82148465

We've not had the Budget yet 🤐

anotherbob

Thanks for all the advice and information.

Just in time too, I was intending to withdraw all the funds from my existing ISA and re-invest, which apparently is not the way to do it!

To be clear I should now choose a provider, based on the interest rate on offer, open an ISA with them, and then ask them to transfer my existing Isa to them. Have I got that right?

Do I wait until my existing ISA has matured before transferring it or can I do it at any time?

El_Torro

Yes, best to transfer from one ISA to another, to avoid losing the tax free wrapper.

I suggest waiting until your ISA matures before transferring it. If you do it even a day before it matures you may be hit with a penalty from your current ISA provider. This penalty could mean you lose out on various months worth of interest.

anotherbob

I forgot to ask…..

If my existing provider should offer an ISA at a rate with which I'm happy I assume I can open a new ISA with them and ask them to transfer the existing one into the new one, am I right?

El_Torro

https://forums.moneysavingexpert.com/discussion/comment/82148624#Comment_82148624

Yes, that's right.

Always worth checking the T's and C's of ISAs, whether you're going to a new provider or staying with your current one. Sometimes accounts are only available for new money, transfers aren't always eligible for the best rates.