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Transfer Your Cash ISAs

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Cherry on the ISA cakeAn ISA is just a savings account that's permanently tax-free. You can save up to £15,240 this tax year in an ISA. But you can also boost rates on old ISA cash.

Many of your old ISAs will be paying rates as low as 0.1%. If you've got one, you can transfer to a different ISA provider to get up to 15 times more interest. It's a lot nicer (for your money) in a ISA!

Cash ISA Transfer need-to-knows

  • Cash ISAs are just savings accounts you NEVER pay tax on

    Everyone in the UK who's 16 or over gets an ISA allowance at the start of each tax year. For 2016/17 it's £15,240 – if you put money in it then it isn't eligible to be taxed, and this stays the same year-after-year.

    It really isn't any more complex than that. Just like normal savings, cash ISAs come in different flavours – there's easy access (where you can withdraw money whenever you want), fixed rate (where you get a guaranteed rate, but are supposed to lock cash in for a set time) and a variety of other types.

    Quick questions

    How many ISAs can you have?

    Is my money safe in an ISA?

  • These days, though, all savings are paid tax-free, so should I still keep my ISA savings?

    On 6 April 2016 the new personal savings allowance (PSA) launched. It means all savings are now automatically paid tax-free. Basic 20% rate taxpayers can earn up to £1,000 interest a year without needing to pay tax on it, higher 40% rate taxpayers £500 (top 45% taxpayers will always pay tax on savings)

    For most people that will be enough to make all their savings tax-free, and therefore the question is simply "what pays the highest rate?"

    The answer to that isn't cash ISAs. So for most people with under around £20,000 of total savings, cash ISAs won't be a winner. For example the Santander 123 account pays 3% on £3,000 to £20,000, more than double the top easy-access ISA.

    In fact all ISAs are easily beaten for most people by both top bank account savings, where you get a high rate as part of your current account, and regular savings accounts.

    So when is a cash ISA worth it?

    The most important thing to note is that cash ISA interest doesn't count towards your PSA, so you can earn it tax-free, and still have your full £1,000 (or £500) PSA allowance. Therefore for top-rate taxpayers or bigger savers who've used up the PSA, there are big tax advantages of saving in a cash ISA.

    - Basic-rate taxpayers over the PSA limit.  For every £100 interest you earn in normal savings you only get £80, whereas in an ISA you get the whole £100. Therefore the normal savings rate would have to be 25% higher for it to beat a cash ISA.

    - Higher-rate taxpayers over the PSA limit. For every £100 interest you earn in normal savings you only get £60, whereas in an ISA you get the whole £100. Therefore the normal savings rate would have to be 66% higher for it to beat a cash ISA.

    - Top-rate taxpayers. For every £100 interest you earn in normal savings you only get £55, whereas in an ISA you get the whole £100. Therefore the normal savings rate would have to be 82% higher for it to beat a cash ISA.

    So cash ISAs can be winners even with lower rates. Also it's worth remembering that while £1,000-a-year interest seems a lot now with our current pitiful interest rates, if interest rates rise then more people will need to pay tax. So saving into an ISA now could protect you from future tax.

    For more on this, read the full Why the cash ISA isn't dead guide.

  • You can transfer your ISA to another provider to boost the rate

    If you've decided to stick with your cash ISAs, you can often get a better rate in a different account – if so, it's a good idea to do an ISA transfer.

    Chasing top rates isn't the only reason to transfer. You might be transferring from an account that restricts when you can pay in, or one that limits your access to your cash.

    You might even be transferring a stocks and shares ISA into a cash ISA or innovative finance ISA, or vice versa.

    There are many reasons to transfer an ISA into a new account, but what they all have in common is that the ISA you're currently saved in is no longer the right fit for you.

    Quick questions

    Any reason not to transfer?

  • Don't take the money out, ask the new provider to transfer it for you

    Transferring an old ISA is a technical process, it's not just like switching a normal savings account. Yet as long as you abide by the golden ISA transfers rule, it should go smoothly.

    If you want to transfer, never, ever, ever, withdraw money from a cash ISA!
    You'll immediately lose all the lasting tax benefits.

    Instead, speak to the new provider and fill out an ISA transfer form. Your new company should then sort it all out, including moving the money over for you, keeping your ISA cash permanently tax-free.

    The banks have agreed to a guideline of 15 working days for the transfer to take place, so you should begin to receive interest within this time. If it goes much over 15 working days, it's worth complaining to the ISA provider to see if they can then speed it up, or at least compensate you if the delay means that you lose a decent chunk of interest.

  • Cash ISAs can now be flexible – letting you replace withdrawn cash

    This tax year, for the first time, flexible cash ISAs have been introduced. This means that you can replace cash withdrawn from an ISA earlier in the same tax year without it using up your year's ISA limit – and this works for previous years' cash too.

    However it is up to different ISA providers to decide whether they will let you do this. We note in our best buys below whether or not the ISAs are flexible.

    For full info on the new flexibility, see Flexible ISAs.

  • Cash in an ISA stays tax-free YEAR-AFTER-YEAR

    Cash in an ISA stays tax-free as long as it's in there. The aim's to protect more of your money which is why we nag you about using the full ISA allowance if you can.

    If you miss a year now, you might regret it five years later. If you've big savings, you can gradually protect more and more of your cash. Those who started saving when ISAs were first introduced in 1999 could now be sitting on a good tax-free lump sum.

Best buys The UK's best ISAs accepting transfers

Not all cash ISAs accept transfers in, especially the top paying ones. Their high rates are intended to grab headlines and new customers, but cost the banks as little as possible. Yet at the moment, many of the best ISAs do allow transfers in, which is great news!

As cash ISAs are generally 'variable rate', meaning they move both with the Bank of England base rate and for providers' own competitive reasons, always check every six months or so that your rate is still competitive. If not, transfer to a better payer. For alternatives to monitoring interest rates, read the Fixed Rate ISAs section.

It's also worth checking how quickly you'd be able to access your money. We list the top transfer-accepting ISAs, but some of these accounts may have withdrawal restrictions or penalties. If you might need it, make sure the account you pick allows you to easily access your money.

Unless stated, all the accounts have full protection under the £75,000 per person, per institution rules. Though do check how institutions are linked and other notes in the Safe Savings guide.

Top easy-access ISAs

If you want to be able to withdraw cash regularly, easy-access ISAs let you do just that...

ISA Principality Logo

Highest rate accepting transfers, and allows unlimited withdrawals

Principality BS 1.1% AER

The e-ISA from Principality BS allows unlimited withdrawals so is a good option if you'll need regular access to your cash. As with the Virgin account below, you can open it with just £1.

1.1,1
Need-to-knows
  • You can make unlimited penalty-free withdrawals from the account.

  • This ISA is now flexible so you can take money out of it and replace it without it counting towards your ISA limit.

  • You can make unlimited deposits, provided you stay within the £15,240 ISA limit.

  • Transfers of previous years' ISA cash are allowed.

  • Principality Building Society has the full £75,000 UK savings safety guarantee.
SUMMARY:

Rate: 1.1% AER variable | Min deposit: £1 | Access: Online | Interest paid: Annually | Allows previous ISA transfers: Yes | Flexible: Yes

Virgin Money logo

Okay rate though limited withdrawals

Virgin Money* 1.05% AER

The Defined Access E-ISA account from Virgin Money* has a okay easy-access rate and you only need £1 to open it. However it only allows three penalty-free withdrawals per year. Make more than this and it gives you a lower interest rate, so if you think you'll need regular access to your cash, perhaps consider an ISA offering unlimited withdrawals.

1.05,1
Need-to-knows
  • This ISA is not flexible so any money you take out of it and replace will count again towards your annual ISA allowance. For more on flexible ISAs see our need-to-know.

  • You get three penalty-free withdrawals a year; any more & the rate drops to 0.5%.

  • You can make unlimited deposits, provided you stay within the £15,240 ISA limit.

  • There's no bonus on the account so you need to watch in case the rate drops. If it does, transfer out to a better-paying ISA.

  • Virgin Money has the full £75,000 UK savings safety guarantee.
SUMMARY:

Rate: 1.05% AER variable | Min deposit: £1 | Access: Online only | Interest paid: Annually or monthly | Allows previous ISA transfers: Yes | Flexible: No

Best buys Linked accounts

Some banks reserve top rates for their own customers. So, these aren't open to all. However, if you find an ISA deal that's really, really good, they're often open to switchers. See Best Bank Accounts to find how these banks' accounts rate.

First Direct Logo

Good rate for First Direct current account customers

First Direct 1.3% AER easy-access

If you have First Direct's 1st Account, you can get its easy-access Cash ISA, which pays a decent rate, and lets you save from just £1. However, the rate's dropping on October 18 - so it's best for the short term.

Need-to-knows
  • The rate's dropping to 0.9% on October 18.

  • This ISA is not flexible so you any money you take out of it and replace will count towards your ISA limit. For more see our need-to-know.

  • You can make unlimited penalty-free withdrawals from the ISA.

  • The rate is variable and can drop at any time. Keep an eye on the account, and if the rate drops, transfer out to a better payer.

  • First Direct shares its £75,000 savings guarantee with HSBC. See more information about the Savings Safety rules.
SUMMARY:

Rate: 1.3% AER variable | Min deposit: £1 | Access: Online/post/phone | Interest paid: Monthly | Allows previous ISA transfers: Yes | Flexible: No

Check your local building society

On occasion a few small building societies may beat these with special deals for people in their locality, or for existing customers, so it's worth checking yours. All these rates are variable, meaning providers can change the interest whenever they like. Therefore always monitor what yours pays and transfer again if it drops. For more options and alternatives, read the Top Cash ISAs guide.

Best buys Fixed-rate ISAs allowing access

If you're willing to lock your cash away, some fixed-rate ISAs offer slightly better rates than the easy-access variable accounts. This is because with fixed-rate providers, you get surety that you won't want your cash back until a set time, allowing them to plan their lending strategies better. But remember...

By law, cash ISA providers MUST allow you access to your money, whenever you want it, though most will levy heavy penalties to do so.

While your money is supposedly locked away for one to five years, providers are forced to permit withdrawals, usually with an interest penalty of up to 365 days. However, they may not allow transfers to other ISA providers, meaning you'd have to lose the tax benefits to get at the cash.

The fixed rate accounts below mostly have a hefty penalty if you withdraw/close the account early. So only look at these options if you definitely want to fix for the entire term of the account.

The best one-year fixed rate ISAs

Product Rate(AER) Min Deposit How to Open Interest paid Withdrawal penalty FSCS Protection
Shawbrook BankShawbrook Bank logo 1.3% £5,000 Online Annually or monthly 90 days' interest Full
Bank of Cyprus UK*Bank of Cyprus UK logo 1.2% £500 Online Annually 180 days' interest Full

The best two-year fixed rate ISAs

Product Rate(AER) Min Deposit How to Open Interest paid Withdrawal penalty FSCS Protection
Shawbrook BankShawbrook Bank logo 1.4% £5,000 Online Annually or monthly 180 days' interest Full
Paragon BankParagon Bank logo 1.35% £500 Online Annually or monthly 180 days' interest Full

The best three-year fixed rate ISAs

Product Rate(AER) Min deposit How to open Interest paid Withdrawal penalty FSCS protection
Paragon BankParagon Bank logo 1.5% £500 Online Annually or monthly 270 days' interest Full
Shawbrook BankShawbrook Bank logo 1.5% £5,000 Online Annually or monthly 270 days' interest Full

The best four-year fixed rates

There are currently no top four-year fixed rates.

The best five-year fixed rates

Product Rate(AER) Min deposit How to open Interest paid Withdrawal penalty FSCS protection
Shawbrook BankShawbrook Bank logo 1.9% £5,000 Online Annually or monthly 360 days' interest Full
Principality BSPrincipality Building Society logo 1.55% £500 Online, post, branch Annually or monthly 360 days' interest Full

How many deposits am I allowed to make into a fixed-rate ISA?

How to compare local, branch-based accounts

Fixed-rate deals can change regularly. We update this guide whenever there's a change, so you'll always see the top ISA accounts accepting transfers here that are available nationwide.

However, we are limited in that we're a national website, so we can't always feature branch-based accounts, for example, from smaller building societies which may have decent rates but aren't available for everyone to apply.

For a full list of fixed-rate ISAs, the Moneyfacts website usually features all ISA accounts on the market. Though remember, it's just a simple list of top rates, so ensure you check for the possible pitfalls noted in this guide.

Do you want to invest for bigger rewards (though you could lose out)?

If you want to up the risk, and potential reward or loss, on your cash ISA money, it's possible to transfer your cash ISA into a stocks & shares ISA. The new ISA rules means you can transfer it the other way round too. Read the full ISA Guide to see what you can transfer, and when.

Want to complain about your savings provider?

If your savings provider has given you the incorrect interest rate, or you haven't received your interest at all, then you don't have to suffer in silence. It's always worth trying to call your provider first to see if it can help, but if not...

Resolver Info Box

This tool helps you draft your complaint and manage it too. It's totally free, and offered by a firm called Resolver, which we like so much we work with it to help people get complaints justice.

If the complaint isn't resolved, you can use Resolver to escalate it to the free Financial Ombudsman Service.

ISA transfer Q&A

Cash ISA transfers are often an area of confusion. To help clear up fact from fiction, we've put together a quick Q&A to answer your queries.

  • Can I swap between stocks & shares, innovative finance and cash ISAs?

  • Can I transfer into an ISA without paying new money in?

  • How do I open a ISA just to do a transfer?

  • Can I transfer more than one old ISA into a new one?

  • Can I transfer old ISAs AND pay new money into one account?