As interest rates continue to fluctuate in line with the Bank of England Base Rate rises, many Individual Savings Account (ISA) savers have been reassessing the markets to find out if they’re investing in the best deal. However, those opting for a swap must be aware of the process to avoid losing their tax-free allowance, experts warn.
An ISA (Individual Savings Account) transfer is the process of moving money or investments from one ISA account to another.
Commenting on the investment option, Lucinda O’Brien, personal finance expert at money.co.uk said: “ISA transfers are a useful tool that can help you take advantage of changing market conditions and new investment opportunities as they arise.
“The benefit of ISA transfers is that they allow you to easily and securely move your money between different ISAs. This can help you to keep your savings flexible and accessible, so you can use them for whatever life throws your way.”
In addition to investing and growing wealth, Ms O’Brien explained how ISAs can also be used for more short-term savings goals, such as saving for a down payment on a house or building an emergency fund.
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So, how exactly can people transfer the balance of their ISA without losing the benefit?
How do ISA transfers work?
Brian Byrnes, head of personal finance at Moneybox, told Express.co.uk: “ISA transfers are thankfully quite straightforward these days. Once you have chosen your new provider you simply go to them and initiate the transfer with them.”
Mr Byrnes continued: “This is mostly done online now but some more traditional providers may have paper forms for you to fill in. Once you have requested the transfer with the new provider, there is not much else for you to do.
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However, Mr Jones noted that it’s important for people to check the terms of their original and new providers to be prepared for possible charges.
He said: “Before starting the process, check that the provider you’re heading to will accept new transfers. Also, see whether your existing provider charges any exit fees, as you’ll want to make sure that any benefits aren’t outweighed by unexpected charges.”
How long does an ISA transfer take?
According to Ms O’Brien, the ISA transfer process can take several weeks to complete.
She said: “It should not take longer than 15 working days for transfers between cash ISAs and 30 calendar days for other types of transfer. The exact time it takes will depend on the ISA providers involved and how they choose to transfer the funds.”