Transferring an ISA from Fidelity to Trading 212

[digitalgirl]

I’m looking to pay off my mortgage in July when the current fixed term ends. It will be £60k. A couple of months ago I took £60k out of the fidelity S&S portfolio and left it in a cash account with them as I was worried with Trump coming in that the markets would drop. I’m now realising I should have transferred to a top performing cash ISA rather than leaving it in Fidelity. It’s only made about £100 in two months.
If I initiate an ISA transfer via the Trading 212 app it’s saying that fidelity doesn’t have a cash isa - will the transfer come out of my S&S portfolio or will it come out of my cash account?

Is the money currently in a cash isa account?

It’s in the cash holding account of a S&S ISA. So not technically a cash ISA.

If the money is not currently in an ISA, then it’s not an ISA transfer, it’s a new ISA investment. But you would only be able to put 20k of it into a new ISA each financial year.

I'm finding equities volatile at the moment. If you want 60k cash and sold equities a few months ago that sounds pretty good to me. It sounds like you have cash held in your S&S ISA. Also ok and probably getting a little interest.
If you want a bit more interest then you could invest in a money market fund within your existing ISA. It'll probably gain interest at a little under 5% (annual). You'll still need to pay the account fee (is that high at fidelity?).

Whilst Trading 212 cash Isa is paying well and probably better than you will get with a money market fund it might not be worth the agro for only a few months.

S&S ISA's can be transferred to cash ISA's, but I have no experience of Trading212.

You could also consider taking the cash now and holding it in a normal savings account. But you should do your own calculation to check it won't exceed your £1000 (or £500) savings allowance.

Is all your Isa in cash, or is some still invested?
Fidelity pay 2.95% on cash, paid around 21st. Perhaps another £150 is about to land.

@torqrench about £20k is still invested with fidelity S&S ISA so the portfolio is still there and assuming I’m not paying tax on that interest? I’m in the 45% tax bracket.

Maybe I’ll leave it in with Fidelity’s cash holding account, as I just wanted it safe ahead of the mortgage repayment.
Listening to the MSE podcast made me think I should move it even just for a few months!
The plan after July is to invest monthly with money we would have put into the mortgage.

I don't think Fidelity offer a cash account, so you are probably holding cash within your S&S ISA account. If so you'll be earning tax free interest at their current rate. Their published rate is 2.95%. Not a market leading rate, but something, and tax free. About £150 per month on £60k. You should satisfy yourself that the cash is held in your ISA account.

If you wanted to transfer and get more like 5%, you'd need to do a partial transfer, leaving the invested part alone. That might be possible but I'm not sure that it would be worth the worry for 4 months. They don't always go smoothly. It would pay more like £250 per month.

If you are feeling a little more adventurous then buying a money market fund within your S&S ISA would give a better return and be pretty safe. https://www.fidelity.co.uk/cash-funds/.

Don't withdraw from the ISA and lose its tax free status until you are ready to pay off your mortgage.

Congratulations on paying off your mortgage. It must feel good.