With savings interest rates falling and everyone looking for the best deals, transferring your ISA to an account with a higher rate of interest might well be on your mind.
uSwitch explains how to transfer your ISA and why it could be a good move to switch.
Why should I transfer my ISA?
With the recent base rate cuts, many people may find that the interest rate on their cash ISA has fallen way below what it was when they took out their account.
In these difficult financial times, it is more important than ever to make the most of your tax-free cash ISA allowance by making sure you get the best interest rate.
For example, if you had £3,600 in a cash ISA paying the average rate of 2.05% APR, you would earn £73.80 in tax free interest. However, if you were to switch to one of the better accounts on the market, paying 4.25% APR, this would more than double to £153.
Check to see what rate your ISA is paying, if it doesn't match up to the best interest rates available, then it's time to switch.
How do I transfer my ISA?
It is far easier to transfer your ISA than you might think.
The most important thing to remember is that should never just withdraw your money from your ISA - or you will lose all your tax free benefits.
To transfer your ISA, when you have opened your new ISA account, ask your old ISA provider for an ISA transfer form and give them your new account details - this will ensure that your bank treats it as an ISA transfer, not an account closure. Alternatively, when you open your new account, your new provider may be able to arrange to transfer your old ISA for you.
It usually takes about a week to transfer your ISA, although in some cases, it can take up to thirty days - however, your money will still be earning interest during the ISA transfer period.
Be aware that not all new ISA accounts allow you to transfer your existing ISA savings. The best rates tend to be for ISA accounts where you cannot transfer, so check this before you apply.
How do I find the best cash ISA?
Always make sure you compare the different savings accounts on offer before you transfer your ISA.
You can compare cash ISAs with uSwitch and compare them by a range of factors, including the interest rate and minimum investment, to find the cash ISA that's right for you.
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