Withdrawing my ISA to pay into a new ISA that does't allow transfers?

A question about : Withdrawing my ISA to pay into a new ISA that does't allow transfers?

Hi,

I have Ј15,186 in my current ISA with Santander on a easy access 'Direct ISA Saver' account earning 1.60% for year 2014/2015. This interest rate is due to end on 7th April 2015, and will drop down to the variable rate of 1% if I do nothing..

I have checked the ISA rates on moneysavingexpert.com and I am interested in the 'top rate fixed cash ISA' with Coventry BS that pays 2.25% interest until 20th November 2018.
I have noticed that they do not allow 'transfers in', however I am thinking if I withdraw all of my ISA from Santander into my current account on 7th April 2015, I would be then able to pay in all of this amount into the Coventry BS ISA for year 2015/2016 which would give me my new allowance of Ј15,240. I understand for that year I will not be able to add any more than this amount, but I was unlikely to add much more than this for that year anyway as I tend to make the odd payments in only occasionally, plus I would be earning decent interest for that year.

Does this make sense and am I able to do this legally?

Other fixed ISA's I have seen with lesser rates do not allow any further deposits in after so many days, so I am thinking after 12 months I will be able to continue to top up my balance making use of my allowance and be on good interest until the end of the fixed term.

I have previously always gone for an easy access account because I thought I wouldn't be able to access my funds if I ever needed to, which has always put me off them. I have learnt that in a fixed term account I would only lose so many days interest by withdrawing.

Any suggestions would be welcomed.

Thank you

Best answers:

• You could do that, but since you are considering withdrawing it, have you considered putting at least some of the money in high interest current accounts where you might earn more than 2.25% even after tax?
• One way (if you are prepared to go through the process):
  You could open a TSB Classic Plus, (set up for paperless correspondence and statements), a Nationwide Flexdirect, a LLoyds Club and two BOS Vantage.
  Also open a Tesco Instant Access Savings Account and an Internet Saver.
  Deposit Ј2000 into TSB, Ј2500 into Nationwide Ј5000 into Lloyds,
  Ј4000 in BOS 1 and the remaining Ј1600 + into BOS 2.
  Set up a monthly standing order for Ј1000 on the same day from BOS 1 to BOS 2 and BOS2 to BOS1.
  Set up a monthly direct debit on each Tesco to the Lloyds account. Ј1 a month on each will do.
  
  Once a month, transfer Ј1500 from TSB to Lloyds, then on from Lloyds to TSB and on to the Nationwide and then back again to TSB.
  You could automate this with standing orders but with internet banking and FP it takes a few minutes.
  Pick up the interest on TSB, NW and Lloyds once a month and transfer to one or other of the BOS accounts.
  When the NW "matures" after a year, transfer to a bank with a switching incentive.......