Cash ISA - transfer question

[chimichangaz]

I have a cash ISA with Coventry BS which is earning crap interest (had it for years). I opened a cash ISA last week with Chip at a much better rate and have just gone to transfer in my Cov BS cash ISA but they are not one of the building societies on their list to be able to transfer from.

All the advice I've seen says to transfer rather than withdraw, but in this instance is there anything stopping me from transferring from the Cov BS to my current account and then transferring it to Chip?

You will lose the ISA status of your money if you do that. So when you pay it into your new Chip ISA, it will use up part of your annual £20k allowance.

If you're talking about an amount under £20k, and you won't be wanting to pay in more than 20k this tax year, then it doesn't really matter.

E.g. if you have 8k in your existing ISA and you TRANSFER to another provider, you can still pay in another 20k to ISAs this tax year. If you WITHDRAW to a non-ISA account and then pay into your new ISA, you will only be able to add another 12k this tax year.

You can transfer but it won't be an ISA anymore, can't you move to a better rate with the same provider?

You will have to close your Cov isa if you want to withdraw the money. When you then deposit the cash into a new isa, you will be using up this year's isa allowance in the new isa, while losing the previous isa allowance. If you transfer in, you keep the original allowance and will still have this year's as well.

Check moneysavirngexpert for the best cash/easy access/fixed rate isa that allows transfers in. Personally, I would look for the highest fixed rate one as I expect interest rates to fall.

Ah of course - that makes sense!! Thank you.

I may well want to pay in 20k this year so it's best for me to transfer it.

Makes complete sense now - I'll have a look at MSE.

Thank you!

Are you sure Coventry are paying poor rates of interest?
They are normally one of the best 'known' banks/BS and have been very competitive. Martin Lewis (MSE) often says they are a good bet.
Between us we have about £110k in ISA's with them and are very happy with the rates we are getting.

@Nourishinghandcream it's an old one that pays 3.4%. With Chip I get almost 5%.

You can open another ISA temporarily with another bank, transfer from Coventry to say TSB ISA and then to chip ISA. Coventry are the best for long-term savings. All other bank only provide temporary boost. You will loose lot if you are not top of your money on those boosted accounts

I did this and lost ISA status so lesson learnt on that - I have put it into a SIPP instead so not all bad news

Can you transfer in another ISA at any point? Or just when you open the new one?