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Looking to improve your ISA rate? Check the T&Cs carefully

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As savings rates continue to plummet, savvy ISA holders are looking to transfer their money to the best buy offerings. But make sure to check the T&Cs carefully as not all allow previous subscriptions.

One of the major pulls of the ISA is that it remains tax free year after year.

But as savings rates have plunged in the wake of the Bank of England cutting the base rate to a historic low of 0.1%, savers need to be more proactive than ever to get the best rate on their money.

However, those who have built up previous tax year ISA subscriptions need to check whether their new prospective bank will accept existing transfers as not all do.

NS&I which has always been a favourite with savers, is now gaining more attention as two of its products sit at the top of the best buy tables. But those tempted to open its Direct ISA paying 0.90% AER will be disappointed as it doesn’t accept previous ISA subscriptions.

NS&I said: “NS&I’s Direct ISA has not allowed transfers in from other providers since it was launched in 2006 and we do not have any plans to change this. We review all of our products regularly and recommend changes to HM Treasury when we believe they are appropriate.”

Data from independent site Moneyfacts lists the following providers that do not allow ISA transfers:

  • Buckinghamshire Building Society’s 30 Day Cash ISA and its Cash ISA
  • Ecology Building Society’s Ecology Cash ISA
  • Harpenden Building Society’s Cash ISA – Simply ISA
  • Progressive Building Society’s Cash ISA Saver
  • Teachers Building Society’s Education ISA (Issue 1) and Cash ISA Notice 90 (Issue 10)
  • Tipton & Coseley Building Society’s Branch ISA (Issue 4).

Rachel Springall, finance expert at Moneyfacts, said: “It’s imperative savers ensure they transfer their ISA if they wish to put their hard-earned cash elsewhere, as if they withdraw their money it will lose its tax-free status.

“Not every single Cash ISA on the market will allow savers to make transfers in, so it is important savers check the terms and conditions before they apply. One notable example is NS&I, with its Direct ISA saver which does not allow transfers in.”

Savers should speak to the new provider and fill out a transfer form. They will then get the transaction sorted, including contacting your current provider and moving the funds over.

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