Why Transfer Your ISA?
If you have existing ISA plans and you are unhappy with the return you are getting then transferring to a new provider to get a better deal is easy.
If you have Cash ISAs then in recent years with falling interest rates, the rates of interest offered by many Cash ISA providers have tumbled. With inflation running at 3% plus over the last 2 years, there is areal danger your money is not maintaining its value in real terms.
By shopping around you can ensure that you are getting the best Cash ISA deal possible. As at October 2012 the lowest rate being paid on an instant access cash ISA was 0.25% versus the highest rate paying 3.06%. That’s nearly a difference of £300 a year assuming your cash ISA value is £10,000.
Transferring your cash ISAs to a new provider is straightforward and won’t cost you anything.
If you have a stocks and shares ISA you may be unhappy with the performance of the ISA or your circumstances may have changed and you may wish to transfer to an ISA provider that provides e.g. a monthly income option. Click here For more information on investment ISA transfers.
How to Transfer Your ISA:
Transferring your Cash ISA is easy and only requires a bit of your time.
1. Firstly you need to shop around for a Cash ISA deal that suits your requirements. Use our website to help find a good deal.
2. The new ISA provider should include in their application pack a “Cash ISA Transfer” form. In completing this you are authorising the new provider to do all the work in transferring your existing cash ISAs over. If you have lots of different cash ISAs with different providers this is not a problem.
3. On receipt of the completed transfer forms from you, your new ISA provider will contact your existing ISA providers and arrange the transfers. The transfer process should take no longer than 15 business working days.
4. Your new ISA provider should start paying interest from day 16 of the process regardless whether the Cash ISA transfer is completed within the standard 15 business day timescale.
5. Once the transfers have been completed your new ISA provider will confirm this to you in writing.
Top ISA Transfer Tips
- With a bit of effort you could get a much better rate of interest on your Cash ISAs. Shop around using our website and other online sites to find the best deal for you. Cash ISA rates are changing all the time so make a note of looking say every 6 months to see how your Cash ISAs are performing in relation to the market.
- If you don’t need access to your Cash ISA money consider a fixed rate or notice account deal as interest paid will often be higher.
- A number of Cash ISA providers pay bonus rates which expire after 12 months. Make sure you diarise the anniversary of your ISA if you have a bonus deal. Then transfer to a new cash ISA provider.
- If you are looking for a fixed rate cash ISA deal and you are comfortable locking money away for a set period of time e.g. 3 to 5 years then you may also wish to consider alternative to fixed rate cash isas.
- You can transfer cash ISAs into stocks and shares ISAs but not the other way round.
- Make sure you do not cash in your old ISAs in order to reinvest into a new cash ISA account. By doing this the proceeds will be classed as new money for cash ISA investment and you will lose the tax free entitlements from previous years.
- Leave the ISA transfer process to the new ISA provider. They will do the transfer work.
- If having taken out your cash ISA in the current tax year there is nothing stopping you moving it to a new provider soon afterwards if you find a better deal. However it is important you read the terms and conditions to ensure there are no interest penalties or conditions before you move your ISA. If there are penalties you may be better off staying put until the time penalties expire.