Investment ISA Transfers
Whether you’re looking to move to another ISA with the same provider or to a new provider all together there can be advantages to transferring such as to secure a better rate or to consolidate your accounts to try and make it easier to manage your money, It is possible to transfer an investment ISA into another Investment ISA or Cash ISA, or vice versa.
ISA providers are required to allow account holders to transfer to another ISA; however it is important to note that providers do not have to permit transfers in to their products.
Providers can also impose an interest based penalty for transferring out, this means if your current provider would impose a penalty for moving, you should first calculate whether this penalty would negate the potential benefits of moving.
Transferring an Investment ISA
If you want to transfer your ISA, it is important that you follow the process; if you merely withdraw the money you will lose the tax efficient advantages.
To transfer your ISA you need to contact the ISA provider you wish to switch to and fill out an ISA transfer form, once you have sent this off the new provider will contact your current provider and arrange the transfer.
Industry guidelines currently recommend that transferring an investment ISA should take 30 days from start to finish, however as this type of ISA can contain a selection of different investment each of which potentially taking different amounts of time to or close it could take a provider longer than 30 days to prepare the money within the ISA for transfer.
What to Consider when Choosing an ISA
When choosing an ISA, there are a number of things to consider. We’ve highlighted some of the most important factors below:
Timescale of investment - If you need access to your capital and you are not looking to invest for the long term you should consider a Cash ISA. However, if you are happy to tie up capital for the medium to longer term you may wish to consider a Stocks and ISA which has the potential to provide better returns then a Cash ISA over the longer term
Attitude to investment risk - If you are not prepared to lose capital then a Cash ISA is probably the better option for you. It good to remember that, over the long term, inflation can erode your capital in real terms so getting a good rate of interest on your cash ISA should be a priority. If you are prepared to risk capital to achieve higher potential returns then a stocks and ISA may be the option for you.
Charges - Different ISA plans will have different charges. It is important that you are aware of what these are and how they could affect your ISA performance. Also be aware that some accounts apply account closure charges if you try to switch before the agreed amount of time.