Why should I transfer my cash Isa?
Most people will want to switch their cash Isa to a new provider in order to get a better rate.
Unlike transferring money held in a savings account, there are certain steps you need to take when transferring Isa savings. Done incorrectly, and your savings could lose their tax-free status and you could end up facing a tax bill.
In this guide, we explain how to move any kind of Isa savings.
Video: how to transfer your cash Isa
Watch our short video below to find out how to transfer your cash Isa to another provider.
How do I transfer a cash Isa to a cash Isa?
Step 1: Find the best rate cash Isa that allows transfers in
The Which? Money Compare Isa comparison tables let you search Isa accounts to choose the best rates based on the quality of service you can expect to get, as well as the benefits of the product itself.
Which? Money Compare tables also make it clear whether or not an Isa accepts transfers in from other providers. Make sure you pick one that does.
We've also outlined the top-rate accounts that accept Isa transfers further down the page.
If you need more help, our interactive flowchart below makes it simple for you to decide whether to transfer your Isa funds, based on how quickly you need access to your money, your attitude to risk and whether or not you're willing to take financial advice.
Step 2: Watch out for penalties
All cash Isa providers must let you remove your money if you wish to, but some may issue a penalty if you do – usually in the form of a reduction in interest.
This is most common with fixed-rate Isas that haven't yet matured - ie. come to the end of their fixed term.
If your current Isa provider charges you for transferring funds, weigh up whether it's worth paying the penalty in order to secure an improved interest rate.
Step 3: Don't do it yourself – get your new provider to arrange the transfer
It's essential that you arrange your transfer through your new provider.
If you simply withdraw the money yourself and seek to reinvest it, this will be subjected to the rules surrounding new deposits. Your savings could lose their tax-free status as a result.
Your new provider will ask you to fill in an Isa transfer form, so you'll need the basic details of your old account to hand. Some providers will also allow you to set up Isa transfers online or over the phone.
Top-rate cash Isas that allow transfers
Not all Isa accounts accept transfers, but we've found the top-rate accounts for each fixed term, and offering instant access. Rates are updated monthly; correct at 21 November 2019.
Instant-access cash Isa accounts (unlimited withdrawals)
Excluding accounts with limited withdrawals and other restrictions, the highest rate account allowing Isa transfers pays 1.35% (Expected Profit Rate, or EPR) from Al Rayan Bank. The minimum deposit required is £50.
The next-best rate is 1.34% AER from The Family Building Society.
One-year fixed-rate cash Isa accounts
Al Rayan Bank offers the highest rate of 1.6% EPR - it requires a minimum of £1,000 to open the account.
The next-highest rate is 1.5% AER from Aldermore.
Two-year fixed-rate cash Isa accounts
The highest rate for a two-year fixed account that allows transfers is 1.8% EPR, offered by Al Rayan Bank. You will need £1,000 to open the account.
United Bank UK offers the next-highest rate of 1.67% AER and requires an initial deposit of £2,000 to start.
Three-year fixed-rate cash Isa accounts
If you're after a three-year fix, the highest rate that allows transfers is currently 1.76% AER from United Bank UK, which you can open with £2,000.
Elsewhere, Aldermore pays 1.7% AER on deposits from £1,000 for the same term.
Four-year fixed-rate cash Isa accounts
You can earn up to 1.75% AER with United Trust Bank for a four-year fixed-term, but you'll need to have £15,000 to lock away as a minimum initial deposit.
Punjab National Bank pays 1.6% AER, and requires you to pay in at least £1,000.
Five-year fixed-rate cash Isa accounts
If you can lock your money away for five years, the highest rate that allows transfers is 2.01% AER from United Bank UK, which you can open with £2,000.
Metro Bank offers 1.85% AER, and requires at least £1 to open the account.
The information here is for information purposes only and does not constitute personal advice. Please refer to to the particular terms & conditions to the provider before committing to any financial products.
How long does the Isa transfer take?
This depends on the type of Isa you have, and the kind of Isa you're transferring it to:
Cash to cash Isa
This should take no longer than 15 working days. When you open up your new cash Isa, you’ll need to tell the provider that you want to transfer from another cash Isa, and they’ll arrange the transfer.
If the transfer takes longer than 15 working days, contact your new provider to complain. Isa providers are obliged to begin paying interest within 15 days of receiving a transfer request, regardless of whether the transfer is completed or not.
Cash to stocks and shares Isa
Transferring from a cash Isa to a stocks and shares Isa can take longer – guidance from HMRC states that it could take up to 30 days. You'll need to fill out an Isa transfer form with your intended stocks and shares Isa provider, who will arrange the transfer.
Stocks and shares to cash Isa
Transferring from a stocks and shares to a cash Isa will depend on what kind of investments you own. If you have funds, such as unit trusts, it takes around five days to cash in your investments; shares take around three days.
Your cash Isa provider should give you a form in which you list the investments you want to sell and arrange the transfer.
Stocks and shares to stocks and shares Isa
Transferring from one stocks and shares Isa provider to another can take as long as three months, depending on how you do it.
Find out more in our guide to stocks and shares Isa transfers.
Remember, there's no limit on the number of transfers you can make, so continue keeping an eye out for the best rates.
Can I move my old Isas?
Yes. You can move all or part of previous years' Isa savings to any other Isa accepting transfers. This will not affect your Isa allowance for the current tax year.
While you're only allowed to hold one 'active' cash Isa per tax year – that is, an account into which new Isa money is being paid – you can hold multiple 'inactive' Isas from previous tax years.
Some people like to have all their money in one place, and so choose to transfer their old Isas into a single new account each year. However, there is no rule that says you must do so.
If you choose to roll up all your Isa savings into one account, be careful that this doesn't push the total amount you hold in savings with a single financial institution above £85,000 – the maximum protected under the Financial Services Compensation Scheme (FSCS).
Find out more: FSCS: are my savings safe?
Can I transfer my Isa if I've already paid into it this year?
If you want to transfer money already paid into an Isa in this tax year, you must transfer all of it.
For old Isas, you can choose to transfer all, or part, of your savings.
If you wish to (and provided you have not paid into a fixed-rate cash Isa), you can transfer all of your savings – including the money you have put into this year's cash Isa – to a new provider. However, be sure to check whether you'd be better off by keeping your cash separate.
Isas that allow transfers may pay lower interest rates than those that don't, so it can make sense to hold two separate Isas each year: one for older savings which you can no longer pay into, and one for the current year's Isa allowance.
Which? Money Compare tables: Fixed-rate cash Isas – all available deals compared.
How do I transfer a cash Isa to a stocks and shares Isa?
There's no limit on the amount of money you can transfer from a cash Isa to a stocks and shares Isa.
However, this option should only be considered if you're happy to accept the possibility of losing money should your investments drop in value.
Step 1: Choose a stocks and shares Isa provider
Stocks and shares Isas are offered by many investment platforms (also known as 'fund supermarkets'), as well as banks and building societies.
In order to select the best provider, you should consider the range of investments offered as well as the fees charged.
We've reviewed 14 platforms, providing unique customer satisfaction scores and star ratings for six different elements of their services.
Find out more in our investment platforms reviews.
Step 2: Fill out a stocks and shares Isa transfer form
Never withdraw money from your cash Isa yourself and then seek to reinvest it with your stocks and shares Isa provider. This type of transaction will be subject to the limits associated with new deposits.
Instead, you'll need to fill out a transfer form with your new provider who will ask you for instructions on how to invest your funds.
Step 3: Wait for your stocks and shares provider to get in touch
Your stocks and shares Isa provider will contact your cash Isa provider to complete the necessary transactions. The process should take no longer than 30 days.
During this process, your funds will keep on earning interest in your cash Isa. Your stocks and shares Isa provider should get in touch to let you know when the transfer has been completed.
There are no limits on the number of transfers you can make per tax year, but it's likely you'll have to pay ongoing charges to your stocks and shares Isa provider and for the specific investments you make, so it's a good idea to do your research before transferring any money.
These fees vary, depending on what you invest in, but aren't usually any higher than what you'd pay if you invested in stocks and shares outside an Isa.
Find out more: What is a stocks and shares Isa?
How do I transfer from stocks and shares to a cash Isa?
Step 1: Choose your new cash Isa provider
Make sure the account works for your circumstances, and that any restrictions will still enable you to use the account as you want to.
You can compare hundreds of cash Isa accounts using the Which? Money Compare tables.
Step 2: Fill out an Isa transfer form from the cash Isa provider
You'll need to state how much you want to transfer, and which investments you want to sell.
The transfer times could vary depending on the types of investments you are selling, for example, unit trusts take around five days to cash in, shares around three.
Step 3: Wait for your investments to be sold
After your investments have been sold, the transfer of your funds from your stocks and shares Isa should take no longer than 30 days.
Please note that the information in this article is for information purposes only and does not constitute advice. Please refer to the particular terms and conditions of the savings account provider before committing to any financial providers.