Last updated: 23/07/2020 | Estimated Reading Time: 3 minutes
Transfer to a better cash ISA
It is now a lot easier to transfer your cash from one ISA to another which means that it is now an even more viable option if you think you could be getting a better deal on a different account.
In this guide we will tell you everything that you need to know about what steps you need to take in order to be able to switch your ISA.
In This Guide:
How long will the transfer take?
Transfer times were shortened considerably in 2010 when the Office of Fair Trading introduced a new rule that said that ISA transfers are now not allowed to take longer than 15 days. This was seen as a major improvement on the previously existing system that often led to your cash dropping off the grid for up to two months before finally appearing in your new account.
The new system is thought to have increased competition in the savings account market as it means that people are more willing to switch between providers if they feel like they could be getting a better deal. The same results have been seen in the current accounts market since the new switching system was brought in.
Benefits to transferring your ISA
The base rate of interest, that is set by the Bank of England, is currently at an all time low. This means that many people will have seen the interest that they gain on their ISA has fallen since they first set up their account.
As a result of this fact, it is even more crucial than normal that people take a close look at how good a deal they are getting on their ISA at the moment. This means examining the level of interest that you are currently receiving on the money that you have deposited. You should compare this to the best levels of interest that are being paid at the moment and if they don't reach that, you should start to consider switching to a more competitive account.
How to make your transfer
People are often put off transferring their ISA because they believe that it will be a long, drawn out process that ultimately will not be worth the hassle. However, this could not be further from the truth. The on important thing that you need to remember is that you are making an ISA transfer and not an account closure. Keeping this in mind will allow you to have your cash tracked as remaining within the ISA system and will therefore not allow it to be counted against your yearly allowance.
To get started with your ISA transfer you need to open a new ISA. To do this you should have a good look around on the market before you make a decision about who to switch to. BY doing this you will be able to make an informed decision about which provider can offer you the most competitive deal. The way to do this is by using a price comparison tool, like the one that we have on offer here at Money Expert. Our free and impartial price comparison tool will allow you to see a wide range of the ISAs that are currently on the market - making it easier for you to see who is offering the best deal.
Once you have opened your new ISA you need to ask your current ISA provider for an ISA transfer form. This form needs to be filled out with various pieces of information including the details of your new Individual Savings Account. This form will prevent your transfer being treated as an ISA closure and will therefore mean that your money is continued to be protected from tax. Some ISA providers may be able to arrange your transfer for you if you've just set up an account with them but you should enquire about this in order to be certain.