The increase could be as much as 10 per cent per annumby Kevin Hart / February 23, 2018 / Leave a comment
Individual Saving Account (ISA) rates may not be setting the world on fire right now but that doesn’t mean you should turn your back on these nifty little accounts. If anything, it’s the ideal time to reconsider your current situation, particularly if you’re stuck in an account paying meagre rates of interest. Why not look to the alternatives?
Above average rates can be found, particularly if you’re willing to lock your money for up to five years. So if you transfer ISA funds, you could make the most of your tax-free allowance with a much better rate.
Subject to qualifying criteria, Deviti can introduce you to a five-year ISA Bond that will pay you an average of 10 per cent per annum. With that sort of return readily available there really is no excuse for not transferring!
So, with that in mind, we thought we’d put together a quick overview of six things you need to know about ISA transfers…
You’re only allowed to pay into one cash ISA per tax year.
However, you can transfer ISAs as often as you like—transfers don’t technically count as paying in, so if you notice a better rate elsewhere you can make a transfer whenever you wish (provided you only pay into one active ISA per year and you’re not locked into a fixed account). It’s also worth noting that you can transfer previous years’ ISA savings to a better account AND open a new one for the current tax year at the same time—previous savings aren’t governed by the “one cash ISA per person per year” rule, and so long as you don’t contribute to both it’s perfectly acceptable to have another one.
You can transfer funds held in an ISA from one provider to another at any time
Just check that they accept transfers—not all of them do. Variable rate accounts tend to be the most willing to accept transfers, and it’s also worth remembering that some providers will charge interest penalties for transferring the money out (usually fixed rate accounts or notice accounts) which could negate any benefits of getting a better rate elsewhere, so make sure to check the small print before lining up a new deal.
You can transfer the current year’s ISA subscriptions and/or all or part of the previous year’s subscriptions to a new ISA