We know ISAs are a great tool for both savings and investments. But there may come a time when you want to transfer your ISA.
In some cases, this will be a great idea, in others it may not go so well. This post will detail how you can go about transferring your ISAs and the pros and cons of doing this.
So, should you transfer your ISA? Read on to help make up your mind…
In this post I’ll cover:
- Can you transfer your ISA?
- How to transfer your ISA
- Why you want to transfer your ISA
- Things to beware of when transferring accounts
Can you transfer your ISA?
Yes, you can transfer your ISA.
You can only have one cash ISA and one Stocks & Shares ISA in any financial year (6 April to 5 April). But, this doesn’t mean you have to stick with the same one all year if you find it doesn’t suit you.
You just have to follow some steps to make sure you do it correctly and don’t lose any of the benefits you have gained.
Don’t panic! It’s not complicated and this post will guide you through everything you need to know.
How to transfer your ISA
It is very simple to transfer your ISA. But, there are certain steps you have to take to make sure you transfer it correctly. Otherwise, you risk losing your benefits.
Firstly, you need to choose which provider you want to transfer your ISA too. At this point you should also check if you’ll face any penalties for moving your money early from your current provider. This may wipe out any benefits you might face.
The most important thing to remember is not to make the transfer yourself. Don’t move the money yourself – if you do you could lose all your benefits.
Instead, your new provider will ask you to fill in an ISA transfer form, so you’ll need the basic details of your old account on you while you’re making the transfer. Most providers will let you set up ISA transfers online or over the phone.
If you’re not sure how to make a transfer, you should be able to find more details on your provider’s website.
Why you want to transfer your ISA
There are a number of reasons you might want to transfer your ISA.
For example:
- To reduce your fees.
- To get a better interest rate.
- You may find a company that better fits your values and ethics.
- There may be an introductory offer or bonus.
- Better customer service.
- Enhanced technology.
Banks are competitive and want your business. Therefore, you are likely to find offers out there which may seem enticing. Additionally, technology is always improving and some providers are further ahead than others when it comes to passing these benefits onto their customers.
Things to beware of when transferring accounts
The grass is not always greener. What looks like a good deal may not be quite as it seems.
Firstly, check if your current provider or bank will charge you a penalty to transfer your account. This could essentially wipe away any joining bonus or increased interest rates you may be hoping to benefit from.
With Stocks and Shares ISAs, you should also remember that past performance is not indicative of future performance. Just because one company’s funds performed well in the past year, it does not mean they will perform well in future years.
Always do your own research and make sure you are happy with the choice you have made.
As with most elements of personal finance, it helps to take a long-term view. Don’t just think about what looks good right now. Think about what will suit you well and help you reach your 5 to 10 year goals and beyond.
Don’t forget to follow me on social media @Katie20Percent to keep up to date with all my latest posts.
Did you know I offer freelance writing services and personal finance workshops and talks for schools, workplaces and organisations? I also regularly feature in the media. Get in touch via kroyalsfreelance@gmail.com or reach out on Twitter @Katie20Percent if you’d like to find out more.
If you found this post about whether or not you should transfer your ISA, please share it with your friends and on social media. Have you ever transferred an ISA? Comment below – I’d love to hear your thoughts!
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