Can you take money out of a Fixed Rate ISA?
Fixed Rate ISAs are a great way to protect your savings from falling interest rates. You’ll get a guaranteed return and tax-free interest for a set period. But what happens if you need access to your money halfway through the term? Can you take money out of a Fixed Rate ISA, or are your savings completely locked away? Here’s what you need to know.
Withdrawing funds before maturity will incur a charge. Partial withdrawals from a Fixed Rate ISA are restricted. Tax treatment depends on individual circumstances and may be subject to change in the future
Can you withdraw money from a Fixed Rate ISA?
Yes, you can usually withdraw money from a Fixed Rate ISA, but you may have to pay a penalty and close your account early. The exact penalty will depend on your provider and the terms and conditions of your ISA, but it’s usually based on the amount of interest paid over a set period.
Learn more: How many Fixed Rate ISAs can I have?
What are the penalties for early withdrawal from a Fixed Rate ISA?
Every provider sets their own rules depending on the account and the length of your set term. The penalty will usually be deducted from your savings’ interest when your account is closed. If you haven’t earned enough interest to cover the penalty, the funds may be taken from your original deposit, leaving you with less than you put in.
Here’s a rough idea of what you might lose if you withdraw early. Make sure to check with your Fixed Rate ISA provider to see what the penalty is for your specific account.
- 1-year fix: lose up to 90 days’ interest
- 2-year fix: lose up to 180 days’ interest
- 3 to 5-year fix: lose up to 365 days’ interest
Can I make partial withdrawals from a Fixed Rate ISA?
Usually, you cannot make partial withdrawals from a Fixed Rate ISA. If you want to access your money, you’ll usually need to close the account and withdraw all your savings. That’s why it’s important to think carefully about how much to lock away and whether you might need access to your savings before the fixed term ends. If you think there’s a chance you’ll need some of your funds before the end of the fix, it might be a good idea to spread your savings across different types of ISA.
For example, you could put a portion in a Fixed Rate ISA for guaranteed interest and the rest in an easy access Cash ISA, where you’ll earn tax-free interest without sacrificing flexibility.
Learn more: Do you pay tax on savings interest?
Is there a penalty if I wait until the Fixed Rate ISA ends?
No, once your Fixed Rate ISA matures, you can usually withdraw or transfer your money without any penalties.
You might also like: What happens at the end of a Fixed Rate ISA?
