How to transfer a Cash ISA to a Stocks and Shares ISA

Looking to move your cash savings away from a Cash ISA to a Stocks and Shares ISA? It’s doable and easy! We’ve got you covered.

Transferring to a Stocks & Shares ISA could mean your money grows much more over time – providing you’re using a sensible investment strategy for long-term growth (at least 5 or more years). Don’t worry, you can simply let the experts handle everything (highly recommended!).

With that in mind, if you haven’t decided which Stocks and Shares ISA to use, here’s the best:

Best Stocks and Shares ISAs (expert-managed)

Where the experts handle things – all you need to do is add money.

Best Stocks and Shares ISAs (self-managed)

Where you manage the investments (pick and choose what to buy).

How to transfer a Cash ISA to a Stocks and Shares ISA

First things first – don’t withdraw any cash from your Cash ISA…

With an ISA, you’re allowed to save up to £20,000 per tax year (across all your ISAs). So, if you have more than this within your current ISA and you withdraw it all, you won’t be able to add it all back to your new ISA in the same tax year.

Therefore, you’ll need to go through the ISA transfer process to avoid using up your annual ISA allowance unnecessarily. Which could have a big impact on your tax-free savings!

Note: the tax year runs from April 6th to April 5th the following year.

But don’t fear, the ISA transfer process is super easy. All you need to do is first find a great new Stocks and Shares ISA provider (the company with the ISA account). To find one of these check out the options above, also check out the best Stocks and Shares ISAs to learn more.

After that, simply let them know you want to transfer your Cash ISA over – which is normally all handled on their website or app. You’ll then have to complete an ISA transfer request form, which they’ll give you. And that’s it. All sorted. 

They’ll get to work and handle the whole transfer process. You can expect to get your money in your new ISA account within 30 days (more on this below).

Cash ISA vs Stocks and Shares ISA

If you’re not quite sure what both of these types of ISAs are, let’s run through them.

What is an ISA?

An ISA stands for ‘Individual Savings Account’ and is a government scheme to help you save more tax-free. You can only pay into one type of ISA each tax year, and you can't exceed £20,000 in total (your annual ISA allowance).

Cash ISA

A Cash ISA is a simple cash savings account, where you add money, in exchange for interest, and the interest you make is completely tax-free. So, you won’t pay any Income Tax on your interest. It’s as simple as that.

Stocks & Shares ISA

A Stocks and Shares ISA, also known as an investment ISA, is where you can invest your money and everything you make is completely tax-free, forever! How great is that?!

So, you won’t pay any Capital Gains Tax, Income Tax or Dividend Tax on any of your investments. This means your money can really grow a lot more over time (vs paying tax).

Typically, investing your money can grow much more than saving cash, if using a sensible investment strategy, and the difference can really be big over time. 

As a rule of thumb, you could expect your money to grow around 7-8% per year on average, whereas with a Cash ISA, the interest rate you’ll get is likely to be a lot lower.

You can either choose to make your own investment decisions, choosing which investments to buy and sell (and when), or simply let the experts handle things (highly recommended).

If you do want the experts to handle things, check out Moneyfarm¹ – they have a great investment record, low fees and are super easy to use. Plus, there’s expert advice too.

Watch out if you’ve got a fixed rate Cash ISA

Before you transfer your Cash ISA, just make sure that your fixed-rate has finished (if you’re on one) with your current provider.

A fixed-rate savings account (Cash ISA) is where you lock your money away in exchange for a (normally) higher interest rate (how much you’ll get in return for depositing your savings). This can range from 30 days to 5 years.

If you are within your fixed-rate period, you might not be able to withdraw your money, and if you are, there’s likely some hefty fees.

It can be a good idea to wait until your fixed-rate ends before looking to withdraw your money, or transfer to a Stocks & Share ISA, although if you think you’ll likely benefit from higher growth from moving to a new ISA to offset the penalty fees, it could still be worth it.

The alternative to a fixed-rate is an instant-access Cash ISA – and these simply mean you can withdraw your cash instantly (or within a few days).

How long do ISA transfers take?

The Government has put guidelines in place for ISA transfers, to transfer a Cash ISA to a Stocks and Shares ISA, it shouldn’t take more than 30 days.

This is the same for Stocks & Shares ISA transfers to another provider, and even to a different type of ISA, such as a Lifetime ISA (to save for your first home), Junior ISA (to save for your kids) and Innovative Finance ISA (loaning money directly to others via a website).

Note: for a Cash ISA to a Cash ISA transfer, it shouldn’t take more than 15 days.

If it takes more than this, get in touch with your new ISA provider to see what’s going on, and you can also complain to the Financial Ombudsman Service (the people who make sure financial firms are looking after you). 

Do I need to transfer all of my cash?

You don’t have to transfer everything within your Cash ISA all in one go. You can choose to move all if you want to, or just a part of it, called a partial transfer.

However, if you’ve paid into your ISA within this current tax year (April 6th to April 5th the following year), you’ll have to transfer everything you’ve paid in this year.

Other than that, you can transfer as much, or as little as you like, from your previous years’ contributions.

Are there fees involved?

There can be fees to pay when transferring an ISA, although not always. The only fee you’d likely pay is from your existing ISA provider to handle the admin, called an exit fee, and is not normally too much.

Your new Stocks & Shares ISA will have fees to hold your investments and buy and sell investments, it all depends on which provider you are going with, but they won’t normally charge a fee to transfer your money into your account.

Can I transfer a Stocks & Shares ISA to a Cash ISA?

Yep. You can move and transfer your ISAs whenever you like, and whichever type of ISA they are. So, if you want to transfer your Cash ISA to a Stocks and Shares ISA, but later on want to transfer it back, or transfer it to another Stocks & Shares ISA, you can!

The process is exactly the same, you’ll need to find a new ISA provider, then simply fill out an ISA transfer form, and your new provider will handle the rest.

If you also want to transfer an existing Stocks & Shares ISA, here’s our guide: how to transfer a Stocks and Shares ISA.

Let’s recap

Pretty straightforward really isn’t it? All you need to do to transfer your Cash ISA to a Stocks and Shares ISA is first find a great new Stocks and Shares ISA provider (see below for the best options).

After that, fill out an ISA transfer form on their app or website (they can help you with this – it’s easy). And that’s it. Your new provider will handle the whole transfer process, and your money will arrive in your account within 30 days.

The best expert-managed Stocks & Shares ISAs are:

• Moneyfarm
• &me

The best self-managed Stocks & Shares ISAs are:

• Trading 212
• AJ Bell

Thanks for reading! We hope that’s make things a bit clearer – and all the best saving within your brand new Stocks & Shares ISA.