Regularly checking whether your cash ISA is paying the best interest rate is a slightly tedious yet important task.
But if a more competitive interest rate isn’t enough of an incentive to make the switch to a new account (which it should be!), a tasty cash bonus for making the move might give you the extra push.
In fact, several cash ISA providers offer cash bonuses of a few hundred pounds, and some stretch this even further.
How to get a bonus
The best way to find a cash ISA that offers a transfer bonus is to scan comparison sites like Finder, or head directly to savings providers’ websites to see what they offer. Even a quick search on Google might bring up options for you to explore – though remember to check whether the deals are still valid.
Each provider might have slightly different qualifying requirements for obtaining the bonus so read through the terms and conditions carefully. Some cash ISAs might require you to have a current account with the same provider.
How the transfer process works
To get your cash ISA bonus, you will need to transfer an existing cash ISA balance across to the new account. To do this, you must use the ISA transfer service which typically involves completing the provider’s transfer form.
If you are opening a new cash ISA you will usually be asked during the application process if you wish to transfer funds in from an existing ISA and you can then complete the transfer form online. If you already have a cash ISA with the provider and want to transfer funds from another cash ISA, you will need to contact the provider to tell them.
Make sure you have checked how much you need to transfer across to qualify for the bonus and also be aware that you can’t usually transfer funds from a cash ISA with the same provider.
Issues you need to be aware of
One of the biggest watch outs with cash ISA transfer bonuses is that you usually need to transfer a large sum of money to get the most cashback. Bonus amounts are often tiered and the more you transfer, the more you earn back.
In some cases, you’ll need to transfer the full ISA allowance of £20,000 to qualify at all, while to get the largest sums of cash, your transfer will often need to be £150,000 to £200,000 – which won’t be achievable for a lot of us!
You should also consider the rate of interest paid on your new cash ISA. After all, there’s little point transferring a cash ISA just for the bonus if the actual interest rate is a lot lower than your current ISA pays. Yes, you might earn £150 for doing so, but you could lose a lot more than that in interest. Similarly, check what type of cash ISA qualifies – if you can only transfer to a fixed rate cash ISA but need access to your money, this won’t be a good option.
It’s also important to ensure you transfer your cash ISA properly. Withdrawing the cash yourself and depositing it into a new account won’t count – your money will also lose its tax-free status. So make sure you follow the provider’s requirements and fill out a transfer form correctly.
Bottom line
There are often many tempting cash ISA bonuses on the market but before getting sucked in, it’s essential to check whether transferring to a new cash ISA is worth it.
Consider whether the account you’re moving to pays a competitive rate of interest and whether there are any restrictions on the type of cash ISA you can transfer to. Also keep in mind that bonuses are often tiered, with the highest bonuses requiring you to transfer a large amount of money which might not always be possible.
However, if you’re happy with the conditions of the transfer and have found a suitable cash ISA to move to, you could end up with a sizable sum of cashback as a reward.
Frequently asked questions
That depends on the provider offering the cashback bonus. However, you’ll usually find it needs to be at least £20,000 to £25,000, with the top bonus rates requiring a transfer sum of around £200,000 or more.
You could earn several hundred pounds by taking advantage of a cash ISA transfer bonus, but it’s important to check whether the move makes sense to you. Many providers ask that you already have a current account with them to qualify, and you should also check whether the type of cash ISA and the interest paid works for you.
Completing a cash ISA transfer form ensures your money doesn’t lose its tax-free status. This will happen if you simply withdraw the funds and move them yourself. Doing this will also affect your annual ISA allowance, and you won’t be able to reinvest the money without it eating into your remaining allowance.
We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables is provided by Defaqto. In other cases, Finder has sourced data directly from providers.
Rachel Wait is a freelance journalist and has been writing about personal finance for more than a decade, covering everything from insurance to mortgages. She has written for a range of personal finance websites and national newspapers, including The Observer, The Mail on Sunday, The Sun and the Evening Standard. Rachel is a keen baker in her spare time.
See full bio
Whatever you’re saving for, find the right Ford Money savings account for you. Ford Money offers a range of savings accounts and ISAs, and our guide takes you through the details.
Choosing between ISAs or normal savings accounts is easier than it seems. Pick the one which pays out most! Read our guide for tips on how to get the most out of your savings pot.
Is Tandem’s app-only bank the right solution for you? We explore the app and all of the features of a Tandem Bank account.
Advertiser disclosure
Finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which Finder receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. Finder compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
How likely would you be to recommend Finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
