It is also a good time to check that you have your money in a Cash ISA with the best interest rate possible.
How many of us have a Cash ISA that has passed beyond its initial first year bonus rate and we haven’t done anything about moving our money to a better ISA? Many Cash ISAs currently yielding between 2-3% interest p.a. only have that rate because of an introductory bonus, designed to draw in the investor. Cash ISA rates dropping to 0.5% or lower after 12 months, are not unusual.
At the present low rates of interest, we can be forgiven for not bothering to look to transfer funds to a better rate ISA. However, the change process is relatively simple, particularly if you have to hand information on ISA products and a form to fill in from your provider, prompting you to take action. Many of us don’t move providers – we’re too loyal! But even if you are staying with your provider, a few minutes work can earn you a few extra pounds in interest.
The five checks and steps to take for a successful Cash ISA transfer are:
1) Check whether or not your new provider will allow you to transfer older ISAs to it, because not all do.
2) Beware of penalties: your existing provider can’t prevent you from transferring but, if you have a fixed-rate or notice ISA, you might incur charges.
3) Contact your new provider and request a Cash ISA Transfer Authority form. Never close your account and transfer the money yourself, as you will lose the tax benefits.
4) On your Cash ISA Transfer Authority form you will be asked to specify the amount you’d like to transfer. If you’re transferring an ISA from the current tax year, you must move the full amount. But if you’ve built up savings from previous years, it’s up to you how much you move.
5) It shouldn’t take longer than 15 working days for a provider to complete the transfer, so complain to your provider if you experience any delays.
