ISA transfer advice

[Alltheusefulitems]

Last year just before and just after April I opened 2 2 year fixed ISAs with different banks and put 20k in each. I am looking to open another ready for the new tax year in April and put max in. Both rates were good at the time but there's better now so am I able to transfer both my other 2 into that one or is it only possible to transfer one? (with a penalty of 90 days interest I believe on both but would need to check tsandcs) I can transfer to the new one Ive got my eye on only on opening. Thanks in advance for any info

No limit on number of transfers that can be done.
Check the terms as they are fixed term ISAs for any interest penalty. You may find you can transfer at end of the fix without penalty.

On 6th April, open the new ISA and have that provider arrange for the others to be transferred in.

Great thank you @nannynick 😊

Check that the new provider accepts transfers in, not all do.

Is your planned new ISA's interest rate so much higher as to make up for losing nearly a quarter of your year's interest on the current ones? How long does your fixed rate last? For example, if you fixed at 4% on each ISA and get £800 interest x 2, 90 days will be nearly £200, again x 2. Is the difference on 40K really nearly £400? And that's assuming that the higher rate/account you're looking at are available in April

You could choose a new ISA in April for your new savings. If there's a deadline to pay in, as is the case with many fixed rate accounts, you can open a different ISA account that accepts transfers for the ones you opened in this tax year and last tax year.

Also, you can already do this at the moment; though you can only pay new savings/your tax year allowance into one cash ISA, you can already transfer old ISA savings separately into a different . From April, the rules change and you can split your new tax year's cash ISA allowance between more than one account/provider, though this will presumably be subject to banks' decisions about the accounts they offer.

I thought you were only allowed to have one ISA?

@elkiedee thank you this is really helpful info...I'm sure I've seen a calculator on MSE for working out interest penalties vs new rate transfers, I'll have a look

@EchoChamber you can only save a maximum of £20000 once per tax year but it doesnt have to be saved into the same ISA each time therefore if you saved £20000 each year for 3:years you could have 3

You're only allowed to put money into one ISA per tax year, so what the OP is suggesting is ok.

You can only pay max 20000 into one ISA each tax year but the others remain as tax free savings

I don’t know this !

Currently you can only put new money into one ISA in a tax year, though this is actually changing in April 2024 (the £20K limit is remaining) but you can transfer existing ISA money into an account which accepts transfers. So in April you find an account offering a good fixed rate at ABC Building Society and put in £20K of new savings.

Your ISAs opened in March 2023 (2022/23) and April 2023 (2023/24) mature later in the year. At that point your ABC account doesn't accept additional money, either new payments in or transfers, and you've used your allowance for 24/25. But my understanding is that you can transfer ISA 22/23 and ISA 23/24 into another fixed/variable rate ISA opened for that purpose, you just can't add new money into it.

I've been looking into this myself in very different circumstances.

@elkiedee ISAs are great for saving on paying tax on interest especially now the rates for savings are reasonably decent but it's so confusing what you can and can't do with them! Thanks for sharing your knowledge

Yes i transferred all 3 into 1 new one.
But mine were at 1% and 1.75%. One was fixed for another year yet. Om making an extra 1k even after losing so many months interest.

@Floofydawgn extra 1k!? That's well worth the transfer penalty

Sorry wrong tag...that was for @PoppingCandles

@PoppingCandles Yes, at 1% and 1.75%, it would be quite easy to make up for hefty interest penalties, and if that's all OP is getting there are lots of accounts to transfer to at between 4 and 5%.

Yes its quite a difference but i did move to variable rate so could drop quickly i guess.