When Is the Best Time to Trade in My Car
When is the best time to move an ISA?
By: Alice Guy (FCA) | 6th July 2021
So you've found a cash ISA with a better interest rate, or a stocks and shares ISA with lower fees and you want to transfer your existing ISA to a new provider, but when is the best time to move your ISA? Should you wait until the end of the tax year or can you start the transfer process straight away?
Can I transfer an ISA at any time?
You are free to transfer your cash or stocks and shares ISA to another provider at any time. You need to open a new ISA and fill in a transfer form with your new provider – they will then sort out the transfer for you.
Don't withdraw the money and reinvest it yourself, because this will count as a new ISA contribution and you could go over the amount you're allowed to contribute in a tax year.
After the transfer has taken place, you'll only be allowed to contribute to the new ISA until the tax year ends. This is because you are only allowed to contribute to one type of each ISA during a tax year and the taxman treats the transferred amount as if you had contributed to the new ISA in the first place.
For example, you have a cash ISA (A) that you are transferring to a new cash ISA (B). After the transfer, you can carry on paying into the new ISA (B) but you can't pay into the original ISA (A) or a third cash ISA (C).
How long does the transfer take?
The transfer can take up to 15 days for a cash ISA and up to 30 days for a stocks and shares ISA.
You need to think about what would happen if you needed your money during that period for an emergency. Do you have access to other savings accounts? This might affect your decision about when the best time is to move your ISA.
When should I transfer my cash ISA?
Think about transferring your cash ISA if you are stuck on a low rate or your current rate – or your introductory offer – is coming to an end as you may be able to get a better rate with a new provider.
Fixed rate cash ISAs often pay higher interest rates and are good if you won't need access to your money for a while. Easy access ISAs are usually better if you need regular access to your cash.
If your current cash ISA has a fixed interest period, check when this period ends. If your current cash ISA has a notice period, you may be required to give notice before you move the money so you don't attract a penalty. You will need to compare any penalties with the potential higher rate of interest you could earn to work out when is the best time to move your ISA.
When should I transfer my stocks and shares ISA?
Check the platform fees you are paying on your stocks and shares ISA and consider whether transferring to a top-rated provider would give you lower fees. Fee rates don't seem large, but they can mount up over time, reducing the total value of your investment.
If you have several smaller stocks and shares ISAs, it makes sense to consider consolidating them by transferring them to one provider. Many providers charge lower fees if you have a larger amount invested with them. Consolidating your ISAs also reduces your admin and makes it easier to keep track of your investments.
As with cash ISAs, check if your stocks and shares ISA has any penalties for transferring out.
When should I transfer between cash and stocks & shares ISAs?
Not many people know that some providers allow you to transfer between cash and stocks & shares ISAs. You might want to transfer out of stocks and shares because you need access to your money in the near future. Or you might want to transfer out of cash because you want to aim for higher returns by investing in stocks and shares.
ISAs are the ultimate tax-efficient but flexible investment. As long as your money stays in an ISA, it is still protected from the taxman.
Still have questions?
If you didn't find everything you were looking for on this page, we have other ways to help:
Was this article helpful?
Yes No
Some offers on The Motley Fool UK site are from our partners — it's how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn't any good, our rating will reflect that, or we won't list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool's alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.
When Is the Best Time to Trade in My Car
Source: https://www.fool.co.uk/personal-finance/share-dealing/guides/when-is-the-best-time-to-move-an-isa/