How many times can I move my cash Isa each year?

I transferred my easy access cash Isa to a new provider earlier this year, but with rates continuing to rise, I now want to move my Isa again to take advantage.

If I switch to the best deal, my rate can go from 2.5 percent to 3.5 percent.

Before I move my money, I’d like to know if there are any potential limitations or drawbacks to switching Isa providers several times a year to pursue the best rates.

How many times can I move my Isa money in a year, are there rules on how much I can transfer and what if I want to keep adding money to it?

And how long does it usually take to transfer an Isa to another bank – and will I still be paid interest during the transfer process?

Ed Magnus of This is Money replies: When interest rates rise, it’s so important to make sure you use your savings as hard as you can.

Easily accessible cash Isa rates is an area where we are currently seeing continuous improvement.

The average Isa rate for cash is currently 2.29 percent, according to Moneyfacts, up from 1.66 percent at the start of the year and up from just 0.27 percent at the start of last year .

> Find the best savings rates using our independent best-buy tables

With a rate of 2.5 percent, your interest is already above average – but you are rightly thinking about switching, since things can now be much better.

The best easily accessible cash Isa rate pays 3.51 percent. On a £20,000 piggy bank, that would equate to earning an extra £208 in interest over the course of a year, compared to if you kept it in an account paying 2.5 per cent.

If you were willing to opt for a fixed-rate Isa, you could do even better, securing up to 4.41 percent — but you’d have to lock up your money for several years, which might not suit you.

How many ISAs can I open in a tax year?

As things stand, you can only open one cash Isa in any given tax year, but transferring an Isa does not count as opening a new one.

With an ISA transfer, you move your money from one provider to another without losing the tax-free benefits.

Moving old ISAs to a new provider will not count towards this fee as the £20,000 limit only applies to money paid from outside an ISA.

You can take all or part of your Isa allowances from previous years with you. However, if you want to transfer your current annual allowance, you must transfer the entire balance.

Under current rules, Isa providers must allow outgoing transfers, but there is no obligation to accept inward transfers. That’s why not all Isa providers do – so it’s always worth checking before switching.

Also keep in mind that some Isa cash providers charge a penalty for closing the account. This is particularly the case for fixed-term contracts that have yet to be settled.

It is always worth checking what these charges are so that you can consider whether the transfer is cost-effective.

To provide some expert insight, we spoke to Anne Bowesco-founder of the advice website Savings Champion.

Can I transfer my Isa more than once a year?

Anna Bowes replies: Good to hear that you are keeping a close eye on your Isa accounts and are willing to transfer them to earn more interest.

There is no limit on the number of times you can transfer your money Isa, although it can take up to 15 days for the transfer to take place, which deters some people from doing it too often.

While there is no limit on the number of transfers you can make, the amount you can transfer depends on the year the original ISA opened.

If you want to transfer the subscription for the current tax year, you must transfer the whole thing. But any previous tax year’s Isa money — whether or not it was recently transferred to a new Isa — can be transferred in part or in full.

However, not all providers allow a partial switch. They can insist that the Isa be closed instead and that all funds be transferred elsewhere.

Do savers receive interest on an ISA transfer?

Anna Bowes replies: You can pay a penalty if you request the immediate transfer of a cancellation Isa or an Isa for a definite period before the end date.

During the transfer process, your money has to be with one provider or the other, so interest has to be paid – although the money can take some time to travel and sometimes money is transferred via check in the mail.

Check with your current provider when your money may not earn interest.

Your Isa cash transfer should take place within 15 days – please object if this has not happened.

When can I add new funds to an ISA?

Anna Bowes adds: As for adding new funds to the Isa after you have made a transfer, this is possible as long as you adhere to the Isa rules.

So you can only subscribe to one cash Isa per year – this means new money deposited from a non-Isa account.

And you can’t deposit more than the annual Isa allowance, which is currently £20,000.

Again, this does not include Ia cash from prior tax years being remitted.