Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • Salem123
    • By Salem123 16th Apr 18, 9:57 PM
    • 6Posts
    • 0Thanks
    Salem123
    Question on Flexible ISA
    • #1
    • 16th Apr 18, 9:57 PM
    Question on Flexible ISA 16th Apr 18 at 9:57 PM
    Hello,
    ok, its late and financial year has already started. I'm still shopping around for good rates and have finally chosen a 1 year fixed rate. Question i have got is, if i withdraw some amount from my flexible ISA which i opened last year and deposit the rest of the money into a 1 year fixed ISA this year, will i loose the amount in this years allowance? Meaning for e.g, if i withdraw 1k from my flexible ISA before depositing it to 1 year ISA, will i be able to save only 19k for this year allowance eventhough the money is from previous savings? I hope i conveyed my question without confusing anyone. Could someone help me please?

    Thanks.
Page 1
    • firestone
    • By firestone 16th Apr 18, 11:44 PM
    • 229 Posts
    • 101 Thanks
    firestone
    • #2
    • 16th Apr 18, 11:44 PM
    • #2
    • 16th Apr 18, 11:44 PM
    its normally best to transfer money from a previous years ISA to save the allowance in a new year or using your example transfer not withdraw 1000 so keeping the 20000
    • Westie983
    • By Westie983 17th Apr 18, 12:45 PM
    • 4,335 Posts
    • 14,893 Thanks
    Westie983
    • #3
    • 17th Apr 18, 12:45 PM
    • #3
    • 17th Apr 18, 12:45 PM
    Hello,
    ok, its late and financial year has already started. I'm still shopping around for good rates and have finally chosen a 1 year fixed rate. Question i have got is, if i withdraw some amount from my flexible ISA which i opened last year and deposit the rest of the money into a 1 year fixed ISA this year, will i loose the amount in this years allowance? Meaning for e.g, if i withdraw 1k from my flexible ISA before depositing it to 1 year ISA, will i be able to save only 19k for this year allowance eventhough the money is from previous savings? I hope i conveyed my question without confusing anyone. Could someone help me please?

    Thanks.
    Originally posted by Salem123
    You will need to do a ISA transfer and not a withdrawal, you will also need to check if your current ISA provider allows partial transfers or not as many only offer full transfer into new isa products.

    You also need to check or know that once the money is in the fixed ISA there is no withdrawals.

    I read lots of customers on here that thinks the rate is good as its fixed but then baffled when they cant pay in each month as its a fixed product and the window to fund can be short (between 7 - 14 up to 30 days)

    Westie983
    Save 12k in 2018 #10 Total (25,000)+10,000/12,000 = 83.33%
    Sealed Pot Challenge ~ 11 #97 Total (410) + 40/500 = 8.00% ( x 11)
    Xmas 2018 1 a Day #2 Total 62.59/365 = 17.14%
    Virtual Sealed Pot #1 Total 750/1,000 = 75.00%
    2 Savers Club 2018 #16 Total (1,500)+-480/2,000 = 51.00%

    Total 11,872.59/15,865 = 74.83%

    I'm a Board Guide on Budgeting & Bank Accounts, Debt-Free Wannabe, Disability Money Matters, and Savings & Investments. I'm a volunteer helping the boards run smoothly, but I'm not a moderator, and do not read all posts. If you see an inappropriate/illegal post then email forumteam@moneysavingexpert.com
    • Salem123
    • By Salem123 18th Apr 18, 12:38 PM
    • 6 Posts
    • 0 Thanks
    Salem123
    • #4
    • 18th Apr 18, 12:38 PM
    • #4
    • 18th Apr 18, 12:38 PM
    Hello both,
    Thanks for your valuable response . From what I understand , its better to transfer the full money and not withdraw anything.


    Also, a very good point on checking whether I could pay in money each month into Fxied ISA. If not, it would be a big problem for me !!!
    • Westie983
    • By Westie983 18th Apr 18, 1:19 PM
    • 4,335 Posts
    • 14,893 Thanks
    Westie983
    • #5
    • 18th Apr 18, 1:19 PM
    • #5
    • 18th Apr 18, 1:19 PM
    Also, a very good point on checking whether I could pay in money each month into Fxied ISA. If not, it would be a big problem for me !!!
    Originally posted by Salem123
    Im 99.99% sure that you will not be able to fund your fixed ISA monthly.

    If this is what you want you will need to have a look at the ISA's which are Instant Access and not a fixed product, there are also some regular saver ISA's on the market, but not sure if they are open to new customers.

    The ones I can think off the top of my head are

    Nationwide
    Barclays

    Westie983
    Save 12k in 2018 #10 Total (25,000)+10,000/12,000 = 83.33%
    Sealed Pot Challenge ~ 11 #97 Total (410) + 40/500 = 8.00% ( x 11)
    Xmas 2018 1 a Day #2 Total 62.59/365 = 17.14%
    Virtual Sealed Pot #1 Total 750/1,000 = 75.00%
    2 Savers Club 2018 #16 Total (1,500)+-480/2,000 = 51.00%

    Total 11,872.59/15,865 = 74.83%

    I'm a Board Guide on Budgeting & Bank Accounts, Debt-Free Wannabe, Disability Money Matters, and Savings & Investments. I'm a volunteer helping the boards run smoothly, but I'm not a moderator, and do not read all posts. If you see an inappropriate/illegal post then email forumteam@moneysavingexpert.com
    • Salem123
    • By Salem123 20th Apr 18, 5:55 PM
    • 6 Posts
    • 0 Thanks
    Salem123
    • #6
    • 20th Apr 18, 5:55 PM
    • #6
    • 20th Apr 18, 5:55 PM
    Hi Westie,
    I just called KentReliance who are providing 1.48% on 1 year fixed Rate ISA. So my questions to them were:


    1. If I withdraw 1k from my current flexible ISA and want to transfer the rest, does their bank allow the transfer ? Ans was that yes I can which I need to mention in the ISA transfer form where it asks for how much to transfer.


    2. Second question was whether this product allow me to deposit monthly within my allowance for this year. Ans was yes this is allowed.


    The only thing which i'm still confused is, whether withdrawing 1k from last year ISA will reduce my allowance by 1k for this year. I think it is , but not very sure !!!


    I went through their website to understand the product more and it says "Top up anytime within ISA limits"

    Am I getting it right or missing something ??


    Thanks for your help.
    • eskbanker
    • By eskbanker 20th Apr 18, 6:20 PM
    • 7,168 Posts
    • 7,618 Thanks
    eskbanker
    • #7
    • 20th Apr 18, 6:20 PM
    • #7
    • 20th Apr 18, 6:20 PM
    The only thing which i'm still confused is, whether withdrawing 1k from last year ISA will reduce my allowance by 1k for this year. I think it is , but not very sure !!!
    Originally posted by Salem123
    Withdrawing money from a previous year's ISA doesn't actually reduce any allowances as such, but if you then pay it into a different ISA (rather than transferring) then it counts towards this year's allowance, or alternatively you could pay it back into the same flexible ISA before the end of this tax year without it counting towards this year's allowance. If you go down the latter route you could transfer it elsewhere without impacting on allowances again, although only to an account that allows transfers in (the Kent one only takes them in the first 30 days)....

    Having said that, I'm not sure I really follow what you're trying to achieve with separate withdrawals and transfers - what's the starting position and what money do see being in which accounts by the end of this tax year?
    • Westie983
    • By Westie983 23rd Apr 18, 6:20 AM
    • 4,335 Posts
    • 14,893 Thanks
    Westie983
    • #8
    • 23rd Apr 18, 6:20 AM
    • #8
    • 23rd Apr 18, 6:20 AM
    As mentioned above if you withdraw 1k and pay it into the ISA then that 1k will count towards the 20k limit for the year, but if you transfer your balance from your existing ISA (within 30 days) lets say for example there is 1500 in there. Your ISA will have 1500 + 20k limit = 21500

    So if you are doing a partial transfer I cant see why you just dont transfer all of the existing ISA, and then you still have the full limit to use. Of course if you are never going to make the full amount withdrawing from existing ISA and paying it in will make little difference.

    As above I'm a little confused why you would want to withdraw and transfer though.

    Westie983
    Save 12k in 2018 #10 Total (25,000)+10,000/12,000 = 83.33%
    Sealed Pot Challenge ~ 11 #97 Total (410) + 40/500 = 8.00% ( x 11)
    Xmas 2018 1 a Day #2 Total 62.59/365 = 17.14%
    Virtual Sealed Pot #1 Total 750/1,000 = 75.00%
    2 Savers Club 2018 #16 Total (1,500)+-480/2,000 = 51.00%

    Total 11,872.59/15,865 = 74.83%

    I'm a Board Guide on Budgeting & Bank Accounts, Debt-Free Wannabe, Disability Money Matters, and Savings & Investments. I'm a volunteer helping the boards run smoothly, but I'm not a moderator, and do not read all posts. If you see an inappropriate/illegal post then email forumteam@moneysavingexpert.com
    • Salem123
    • By Salem123 25th Apr 18, 3:34 PM
    • 6 Posts
    • 0 Thanks
    Salem123
    • #9
    • 25th Apr 18, 3:34 PM
    • #9
    • 25th Apr 18, 3:34 PM
    Hello both,
    thanks for your response. I have a perrsonal need for which i need to withdraw little money from flexible before i convert the rest into a fixed ISA for a year. Hence the question on withdrawal from Flexible ISA.

    AS i udnerstand, once i transfer the current ISA to fixed 1 year ISA, i cant withdraw the money for personal need

    Thanks.
    • bowlhead99
    • By bowlhead99 25th Apr 18, 4:30 PM
    • 7,843 Posts
    • 14,319 Thanks
    bowlhead99
    AS i udnerstand, once i transfer the current ISA to fixed 1 year ISA, i cant withdraw the money for personal need
    Originally posted by Salem123
    The whole idea of committing to a 'fixed 1 year ISA' is that they will pay you a high fixed rate of interest on your cash deposit because they know you won't be planning to take it back before the term expires, so they can lend it out to mortgage customers or personal loan customers without worrying about having to pay you back next week.

    If you do need to urgently get to your money before the year is up -for example, because you had not been very truthful with yourself when you said you could definitely afford to lock it away in a product fixed for a year - they will let you withdraw or transfer elsewhere; but will charge you a penalty equivalent to 180 days interest on the money you withdraw. If the money you withdraw has not actually been there for as long as 180 days, you might get back less than you had put in, after the penalty has been taken from you.

    So, if you need money for personal reasons over the next year you have two basic choices. Either take that money out of your old flexible ISA first and transfer a smaller remaining balance over to the new fixed ISA, closing the old ISA. Or keep the flexible ISA open and when you complete the transfer form to the new fixed one, ask to transfer a specific amount of money (that you can afford to commit for a year) and leave the rest in your previous flexible ISA.

    i cant withdraw the money for personal need
    Cheer up, there's no need for a sad face.

    If you want the money to be flexibly accessible without a penalty, use a flexible or normal easy-access product.

    If instead you don't need the money to be accessible in the next year and would prefer to get a higher interest rate, use a 1 year fixed product but be aware there will be a penalty if you change your mind and want the money back within the 1 year fixed period.

    If you're not sure if you need some of the money or not, just put some in the fix and some not.

    It's a good thing that you have a choice of accounts, not a bad thing, so that's not
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

3,327Posts Today

4,349Users online

Martin's Twitter
  • It's the start of mini MSE's half term. In order to be the best daddy possible, Im stopping work and going off line? https://t.co/kwjvtd75YU

  • RT @shellsince1982: @MartinSLewis thanx to your email I have just saved myself £222 by taking a SIM only deal for £7.50 a month and keeping?

  • Today's Friday twitter poll: An important question, building on yesterday's important discussions: Which is the best bit of the pizza...

  • Follow Martin