Cash ISA savers are increasingly having to invest in more than one account to take advantage of the best rates, research by Moneyfacts.co.uk has found.
This ISA season, there has been a growing trend of ISAs which refuse to accept transfers in, meaning that savers looking for an account to move their existing ISA funds are having to look further afield.
It is a far cry from the early days of ISAs, when savers simply had to look for the best rate for their money.
"Many people have ISAs going back several years and they will naturally want to ensure that the whole of their ISA pot gets the best return," said Sylvia Waycot, spokesperson for Moneyfacts.co.uk.
"That will not be as easy under this new trend as many of the ISAs refusing transfers in are best buys.
"Taking one of these accounts means splitting your ISA pot into at least two accounts, potentially with two providers paying two different rates."
Currently, the best rate available in the cash ISA market is 3.50% (including a 2.50% bonus) from Cheshire Building Society's Direct Cash ISA (Issue 2).
However, the account does not allow existing ISA balances to be transferred in.
In fact, the best paying account that does allow investors to transfer in their existing balance is Santander's Direct ISA Issue 9, which offers a rate of 3.30% (2.80% bonus).
The importance of transferring balances is becoming greater as providers increasingly use introductory bonuses to boost the rate, with returns falling significantly when the bonus period expires.
· Research the best rate and check that you are happy with how the account operates.
· Record all details of bonuses and 'go to' rates; this is especially important if you have to manage new and existing ISA accounts.
· Before transferring ISAs check there are no penalty notice periods that need to be avoided.
· Remember that ISA providers should transfer your account within 15 days of application.
· ISAs for the forthcoming tax year start to be launched in February each year, so set a diary note to start your hunt at the same time.
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