A guide to flexible cash ISAs | SavvyWoman.co.uk

Flexible cash ISAs – what are they and who offers them?

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At our ISA event yesterday, the concept of ‘flexible ISAs’ was mentioned. These are ISAs that let you take cash out and put it back in. Find out about flexible cash ISAs and how they work.

Flexible cash ISAs – what they are

The advantage that flexible ISAs have over ordinary cash ISAs is that you can take money out and pay it back in again without it affecting your ISA allowance. With ordinary (non-flexible) cash ISAs, once you’ve paid in the full ISA allowance, you can’t pay any more in. That’s the case even if you take some money out. However, with flexible cash ISAs, you can pay money in, take it out, and top your ISA back up again.

SAVVY TIP: Generally, variable interest rate cash ISAs are more likely to be flexible. That’s because fixed rate cash ISAs can have a clause that says you can’t take money out of them until you cash them in. Also, you can generally only pay money into them in the first 30 or 60 days. If you are allowed to take money out you generally have to pay a penalty by way of lost interest. Help to buy ISAs and Junior ISAs are not flexible. The rules say that the money has to stay in them until it’s withdrawn to buy a house or until the child reaches 18.

How a flexible cash ISA works

In order to explain how they work, it’s probably easiest to use an example. So, if you had £15,000 in cash and paid it into a flexible cash ISA, if you wanted to take out £5,000 and then top it up with £10,000, you’d be able to do that. In the tax year 2019 – 20, the ISA allowance is £20,000. But if you had an ordinary ISA and had £15,000 in cash and took out £5,000, you’d only be able to pay in £5,000. That’s because you’d have used up £15,000 of your allowance originally.

Flexible cash ISAs – who offers them?

Not all banks or building societies offer flexible cash ISAs. That’s because the rules say that banks don’t have to offer flexible cash ISAs if they don’t want to. Those that do include:

Aldermore Bank: its notice and fixed rate cash ISAs are flexible. You can read about its flexible ISAs on its website.

Bank of Scotland: its variable rate cash ISAs are flexible. Its fixed rate cash ISAs aren’t.

Barclays Bank: it has both variable rate and fixed rate cash ISAs that are flexible.

Clydesdale Bank: it has a Flexi cash ISA, which is variable rate. Its other ISAs aren’t flexible. Read more on its ‘tax efficient savings’ page.

Co-op Bank: it doesn’t offer a flexible cash ISA.

Coventry Building Society: it has an easy access flexible cash ISA. Its fixed rate cash ISAs aren’t flexible.

First Direct: it doesn’t offer a flexible cash ISA.

Halifax: its variable rate cash ISA is flexible. Its fixed rate cash ISAs aren’t.

HSBC: it doesn’t offer a flexible cash ISA.

Leeds Building Society: it doesn’t offer a flexible cash ISA.

M&S Bank: it doesn’t offer a flexible cash ISA.

Metro Bank: it has a flexible easy access cash ISA. It also has fixed rate cash ISAs that aren’t flexible.

Nationwide Building Society: its variable rate cash ISAs are flexible cash ISAs.

NatWest: it doesn’t offer a flexible cash ISA.

Newcastle Building Society: it has both variable rate and fixed rate cash ISAs that are flexible cash ISAs.

NS&I: it doesn’t offer a flexible cash ISA.

The Post Office: it doesn’t offer a flexible cash ISA.

Sainsbury’s Bank: it doesn’t offer a flexible cash ISA.

Santander: it doesn’t offer a flexible cash ISA.

Shawbrook Bank: it doesn’t offer a flexible cash ISA.

Skipton Building Society: it has variable rate flexible cash ISAs. Its fixed cash ISA isn’t flexible.

Virgin Money: its easy access cash ISAs are both flexible. However, its fixed rate cash ISAs aren’t flexible.

Yorkshire Bank: it has a specific flexible cash ISA. Its other ISA products are not flexible.

Related articles:

Video: How to transfer a cash ISA

Stocks and shares ISAs; understanding how they work

The basics of cash ISAs; making the most of tax-free savings

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