How to Transfer Your Money from One Cash ISA to Another
You might have already opened an ISA in previous years but have since found a better deal and want to move your money across. This is possible, but you will need to follow a certain number of steps.
Many providers will advertise high interest rates for new customers, but drop these after a fixed term. So it's always a good idea to keep an eye on the amount of interest you earn in your current account, to see if you want to move your money elsewhere.
There are some key things to be aware of when transferring your ISA to another provider.
- You can transfer any ISA you hold – this includes both ISAs opened in current years and ISAs opened in previous years.
- You can split the money from previous ISAs into different accounts – but only from ISAs opened in previous years.
- If you want to transfer your ISA from the current tax year, this has to be done in some lump sum or it will lose its tax exempt status.
- You can move all of your money from ISAs opened in previous tax years into one bank account to put all your cumulative savings into one place.
- This money will be protected from tax up to the Financial Services Compensation Scheme (FSCS) scheme maximum of £85,000.
A step-by-step guide to how to transfer an ISA account
Step One: Do your research
There are so many ISA accounts out there, it is always worth shopping around to find the best possible rate to maximise the returns you will get on your savings. There are different types of Cash ISA available, so evaluate what you want from your ISA and then choose an account which fits your needs.
Step Two: Check your providers
Check that your desired provider takes transfers from other ISAs – some providers do not, so it’s possible your attempt will be rejected right off the bat if you have not checked this. Your current bank is required by law to ensure that they accept your request for transfer – but your desired provider is not, so making sure that this is a feasible transfer is key.
Step Three: Read the small print
Some providers will charge penalties for withdrawing or transferring from ISA accounts. It’s worth looking into this beforehand so you won’t be caught out by any unexpected charges.
Step Four: Contact
You need to make sure that you contact both of the providers so that they take care of the transfer. If you take the money out and move it yourself, then this will mean that your money will lose its tax-exempt status, which negates the point of an ISA.
Step Five: Wait
It should take 15 days for your money to move across. You don’t need to do anything at this stage – both of the banks should move the money between them with no input from you.
Step Six: Follow up
Once the 15 days have passed, check with your new provider to make sure everything has gone smoothly.