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Can I transfer an ISA and open a new one?
Question: As I was a bit late getting organised, I put £20,000 into an easy-access cash ISA at the end of the last tax year in a last-minute effort to use up my allowance, but now I’d like to move it to a fixed-rate ISA. Are there any restrictions on transferring it so soon? And will the transfer affect this year’s ISA allowance?
It was a smart move to make use of your ISA allowance before the end of the last tax year—especially with increasing speculation that the current £20,000 cash ISA limit could be reduced in the near future. Every year, many people miss out simply by not acting in time, so even a last-minute deposit means you’ve managed to make the most of your tax-free savings allowance.
Choosing an easy access ISA was a sensible decision too. It gives you the flexibility to pause and reflect on how and when you might need access to that money - perfect for reassessing your financial goals without locking anything in immediately.
Now to your question - yes, you absolutely can move funds from an easy access ISA to another ISA, even if you just opened it. There’s no minimum time you need to hold the funds before transferring. You can choose to transfer the full amount or just a portion, either to a new provider or within the same one, especially if they’re offering a competitive fixed rate that fits your needs. But it’s always wise to shop around to get the best returns. You can find our best buy tables here.
Just one crucial reminder: always transfer using your new provider’s official ISA transfer process. Withdrawing the money yourself and redepositing it could strip away the tax-free status and use up part or all of the new year’s ISA allowance.
For those who have already opened the current year’s cash ISA, following the ISA rule changes introduced in April 2024, you now have even greater flexibility when it comes to transferring. Unlike before, when only full transfers of the current year’s ISA were allowed, you can now make partial transfers too - giving you more control over how you manage your savings.
Importantly, as you managed to open and deposit cash into your ISA ahead of the end of the tax year on 5th April 2025, you can still deposit up to £20,000 until 5th April 2026, as well as transferring last year’s easy access ISA.
That said, it’s worth getting a move on - both with transferring your existing ISA and opening a new one. There’s a lot of talk in the markets about possible interest rate cuts in the near future. If you’re considering locking into a fixed rate, now might be the time to act before the most attractive deals disappear. Fixing your rate now could help protect your savings from potential rate drops, giving you the chance to enjoy inflation-beating, tax-free interest over the term.
And remember, using your new ISA allowance sooner rather than later means you start earning tax-free interest earlier, which could make a meaningful difference over time.
This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions.
The Financial Conduct Authority (FCA) does not regulate tax advice.
The opinions shared in this article are solely those of the individual and they do not necessarily reflect those of The Private Office.
