When is the best time to transfer and ISA?
There isn’t necessarily a “best time” to transfer an ISA, as it depends on your individual circumstances and goals. However, here are some factors to consider if you’re thinking about transferring your ISA:
Interest rates
If you find an ISA offering a better interest rate than the one you currently have, transferring may be beneficial. It could be a good idea to regularly compare rates to see if a switch makes sense.
Account features
Are you looking for more investment options, or a specific account feature such as flexibility to withdraw? Transferring ISAs may be a good option while keeping your tax-free benefits.
Changes to your goals
If your financial goals change, you might need a different type of ISA. A transfer allows you to switch to a more suitable option.
Important note: Some ISAs, such as Fixed Rate ISAs or Lifetime ISAs (LISAs) may have withdrawal charges if you transfer before the fixed term ends.
How long does it take to transfer an ISA?
While the exact time frame depends on the type of ISA, most ISA transfers typically take between one to four weeks to complete. Here’s a quick breakdown:
- Transfers into a Skipton Cash ISA from another Cash ISA usually take up to 7 business days.
- Transfers from Stocks and Shares ISAs, Innovative Finance ISAs and Lifetime ISAs take approximately 30 calendar days.
Important to know: if you intend on transferring money out of a Lifetime ISA into another type of ISA before the age of 60, you will normally have to pay a 25% government withdrawal charge, which would mean you would get back less than you paid in.
Here at Skipton Building Society, we work hard to ensure a smooth and efficient transfer process for your ISAs. We’ll keep you informed throughout and answer any questions you may have.
How much can you transfer from one ISA to another?
If you’re considering transferring money from one type of ISA to another, the amount you can transfer depends on the ISA type:
Cash ISAs
The annual ISA contribution limit doesn’t apply to transfers for Cash ISAs. This means you can transfer the entirety of your existing Cash ISA balance from your existing provider to your new one if they’re offering a better deal.
Lifetime ISAs (LISAs)
Transfers into LISAs follow different rules. If you transfer the previous tax year’s savings into a LISA from a different type of ISA (e.g. Cash ISA), it will count towards the annual LISA allowance.
Learn more about your ISA allowance and contributions here.
Can you transfer part of an ISA to a new one?
In most cases, you have the flexibility to transfer a portion of your existing ISA to a new provider if your ISA was opened in the previous tax year.
This means you can choose to keep a certain amount of money in your current ISA whilst transferring the remaining balance to another ISA which might have a better interest rate or is more suited to your goals.
However, if your Skipton Cash ISA, was opened in the current tax year, you’ll be required to transfer the full balance out. Partial ISA transfers in are allowed. Internal ISA transfers have to be in full, as do partial ISA transfers out.
Some providers have a minimum transfer amount requirement, so be sure to check whether the partial transfer you plan to make meets the threshold.
Will I lose interest if I transfer my ISA?
For the majority of Cash ISAs, you won’t lose any built-up interest when transferring an ISA.
However, here’s some things you should know:
Easy Access Cash ISA Transfers:
For most types of Cash ISA, your current provider will pay you any interest earned up to the day the transfer is carried out. You’ll then start earning the rate of interest on your new ISA from the day it transfers over.
Fixed Rate ISA Transfers:
Some Fixed Rate ISAs may charge an early exit penalty if you transfer or withdraw your savings before the fixed term ends. This penalty could eat into the interest you’ve earned and you could get back less than you paid in. Always check the terms and conditions of your Fixed Rate ISA before carrying out a transfer.