ISA/savings?

[user1471543683]

My son has an isa with 21000 in it. From memory this was a 2 year fixed isa which is now finished and on checking the interest rate is now down to 1%.
Does anyone have any recommendations on what he can do with it now. It seems that savings accounts have about the same interest % as ISAs.
he will not need to access this for the next couple of years.
thanks

If he doesn’t need access could he transfer it to a stocks and shares ISA? It’s the only possible way to get more interest than inflation but there is also the chance that he may not keep the capital he has put in.

If he needs access to the money in a couple of years, avoid stocks and shares investments - they are for the longer term of 5+ or ideally 10+ years to reduce the risk of losing capital.

Possible options:
Transfer to Cash ISA with Trading 212 paying 4.82% for 12 months (via MSE link for the bonus). review after a year.

Transfer to S&S ISA in a money market fund on a low cost platform such as Trading 212 or InvestEngine. These are low risk, low volatility investments in high-grade, short-dated government and corporate bonds that aim to produce a steady return. Currently paying just over 5% after fees.

https://www.moneysavingexpert.com/savings/best-cash-isa/#options

Will he be wanting to buy a house someday? Can he spare £4k until he does buy a house? Moving some of his ISA money into a LISA might be an idea, due to the huge bonus he would get.

www.moneysavingexpert.com/savings/lifetime-isas/

Agree with PP "Transfer to Cash ISA with Trading 212 paying 4.82% for 12 months (via MSE link for the bonus). review after a year."

Just done exactly this with some of my savings

Yes , transfer it to a new ISA.

But do it through the ISAs, do not withdraw the money into his bank account and then transfer it into the new ISA. If you do this he can only put in £20k, not the full £21k

I think you set up the new ISA and tell them the funds are coming from another ISA and they manage the transfer.

Transfer it to another ISA but be very very careful to follow the steps so that it is directly moved from one ISA product to another ISA product.

Do not cash out i the middle or you they will be liable for tax.

Open a Trading 212 Cash ISA account
From the Trading 212 account, request an ISA transfer, and give them details of where the existing ISA held,

This keeps all the 21k funds within an ISA wrapper, and preserves your sons ISA allowance for this tax year as well, i.e. he can add up to another 20K to it this tax year if he has not paid money 'in' to any ISA this tax year already.

Any money that's already been paid in to an ISA since April 6th 2025 you subtract from this years 20k allowance.

Such bad advice! Just transfer it to a new cash ISA. Google beat rates.

double check the rates offering. I think Trading 212 offer a lower rate for transfer ISAs
Check out MSE to get the rate for transfer ISAs