Isa transfer cashback deals: Give your Isa a £2,000 boost for the new tax year

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Isa investors could give their pots a boost of up to £2,000 for transferring their Isa to Fidelity before the end of the tax year.  

Fidelity is running an Isa transfer cashback deal worth up to £2,000 for investors who transfer an Isa, pension or investment account to its platform before 1 April 2024.

Depending on how much an investor transfers over, they could receive between £200 and £2,000 in cashback. 

Transfer boost: Investors could give their Isas a boost of up to £2,100 for transferring to providers Freetrade or Fidelity

Hargreaves Lansdown and Interactive investor both ran bumper cashback deals earlier this year, worth up to £5,000, but these have now ended. 

Meanwhile, Freetrade is also running a free share offer for investors who transfer an Isa or Sipp to the platform. Investors could get up to £2,100 with the deal. 

How much cashback can you get with Fidelity’s deal?

Investors transferring an Isa worth between £25,000 to £49,999 could receive £200 in cashback, while those transferring Isas worth £50,000 to £99,999 will receive £500. Investors transferring £100,000 to £249,999 will receive £1,000 in cashback.

If you transfer an Isa worth £250,000 to £749,999 you will receive £1,250 in cashback and those transferring £750,000 to £999,999 will receive £1,500 in cashback. 

Transfers of £1million and over will receive the maximum cashback of £2,000.

The cash will be paid directly into your Fidelity cash management account within 90 days of the offer ending on 1 April 2024.

If your Isa transfer hasn’t been completed by then, Fidelity will pay the cashback within 90 days after the completion of your last eligible transfer. 

Freetrade’s free share deal

Investors can earn up to £2,100 in free shares from investment app Freetrade* for transferring an Isa or Sipp to the platform before 5 April. 

The amount they will get in free shares depends on the amount they transfer into a Freetrade Isa or Sipp.

The value starts at £100 in free shares for a £10,000 transfer, and goes up to £2,100 in free shares for a transfer of £500,000 or more.

Investors need to deposit at least £10,000 into a Freetrade Isa or Sipp to get the offer.

The way it works is that Freetrade will give investors a free share, or shares, worth the value of the award. These are set out in the table below.

The free shares will be put in a customer’s general investment account rather than Isa or Sipp as there are restrictions around crediting money or shares to tax wrappers.

Customers can sell the shares immediately and move the cash into their Isa or Sipp if they choose to.

New customers will need to download Freetrade’s app and open either an Isa or Sipp account with an annual Standard or Plus subscription before they can get the offer. 

Investors then need to top up their account or start a transfer for at least £10,000 into their Freetrade Isa or or Sipp on or before 5 April 2024.

If you make withdrawals or transfers out that cause the value of your Isa or Sipp transfer to fall before Freetrade awards the share, the value of your free share will be affected. If it falls below £10,000, you will not receive a free share.

The free share will land into your general investment account within 90 days.

Is it worth transferring for a cashback deal?

As with any big decision like transferring an Isa or pension, it is vital to do your due diligence.

Keep exit fees in mind. Your current pension provider may charge you exit fees if you look to leave or transfer your current pension. Fidelity will cover up to £500 if your current provider charges exit fees. 

Fidelity does not charge a transfer fee if you decide to transfer to another provider after transferring to Fidelity, neither does Freetrade. 

There is a caveat with Fidelity’s deal. If you don’t keep your investments in a Fidelity Isa for 18 months after you transfer them and jump ship to another provider, any cashback paid may be revoked. 

Do also think about charges when it comes to your investment platform. 

Fidelity share dealing has a flat £7.50 fee and this charge also applies to investment trusts and ETFs. There are no fund dealing charges for buying and selling.

Holding investment funds comes with a 0.35 per cent charge up to £250,000 and 0.20 per cent above that, falling to 0 per cent above £1million.

However, if you are investing small amounts the charging structure is slightly different.

Fidelity charges £7.50 per month (£90 a year) for portfolios up to £25,000, or the 0.35 per cent rate applies if you have a regular savings scheme set up.

Freetrade has fee-free share dealing and offers a wide range of UK and US shares. It has some ETFs and some investment trusts, but nowhere near the range of the bigger platforms.

Freetrade’s Basic plan for a general investment account has no charges, while its Standard plan for those who want an Isa and full range of stocks has a £4.99 per month fee and its Plus account is £9.99 per month, which investors need if they want a Sipp.

Some stocks, including many smaller companies, are only available on Freetrade Standard and above plans.

The Standard Plan gets customers 1 per cent interest on up to £2,000 of cash while the Plus plan gets them up to 5 per cent interest on up to £4,000. A foreign currency charge of 0.45 per cent applies for overseas stocks.

Annual charges are capped at £45 for holding shares, trusts and ETFs.

Bear in mind that it could take up to two months for the Isa transfer from your current provider to complete. 

Once the transfer has begun, you won’t be able to switch, top up, or sell the investments you’re moving until the process is complete.

If you have a big pension pot to transfer, Fidelity’s cashback deal looks attractive as you could get up to £2,000. 

Freetrade’s deal offers the highest reward value of £2,100 in free shares for transfers of £500,000 or more. While not actual cash, investors can sell the shares immediately and move the cash into their Isa or Sipp. 

This deal is only for Isas and Sipps, whereas Fidelity will give you up to £2,000 cashback for transferring a general investment account. 

This post first appeared on Dailymail.co.uk