How to withdraw money from a Cash ISA

When can I withdraw money from a Cash ISA?

You can usually withdraw money from a Cash ISA at any time, but some providers will penalise you for accessing your money before an agreed date. It all depends on the type of Cash ISA you have. If you have a Fixed Rate Cash ISA, you will have agreed to lock your money away for a set time period in return for a fixed rate of interest. If you withdraw your funds before the end of this set period, you usually will incur a penalty. If you have an easy access Cash ISA however, you can access your money whenever you want without incurring a penalty for withdrawing.

We’ve gone over these different types of Cash ISA accounts in more detail below:

Fixed rate Cash ISA

Fixed Rate Cash ISAs offer you a fixed interest rate for a set period of time, usually between 1 and 5 years. They’re a great tool for protecting your savings from falling interest rates, but they’re unsuitable for emergencies and short-term savings. 

If you make a withdrawal before the end of your fixed term, your provider may:

• Charge a penalty fee, such as deducting anywhere between 30 to 360 days’ interest from your balance
• Reduce your interest rate
• Close your account

The rules vary from one provider to the next, so read the terms and conditions carefully before opening an ISA. For example, if you withdraw from the Tembo Fixed Rate Cash ISA before maturity, you will incur a charge equal to 90 days of interest on the amount taken out. This means you may get back less than you put in. 

Need flexibility and fast access to your cash? You’ll be better suited to an easy access Cash ISA instead.

Learn more: Can you have more than one ISA?

Easy access Cash ISA

If you have an easy access Cash ISA, you can usually access your money at any time for any reason. So whether you’re saving for a house, a rainy day or a holiday, you should be able to make a withdrawal without having to pay a fee, close your account or accept a less competitive interest rate.

Some ‘easy access’ accounts still come with limitations, however. For example, if you choose to open an easy access Cash ISA with Plum or Moneybox, you can only make three withdrawals each year, otherwise, your rate will be lowered. 

With a Tembo Cash ISA, you can save for your next life goal without worrying about having to dip into your funds. We won’t hold your money hostage or make you jump through hoops to spend your own money. You can request a withdrawal in seconds using the Tembo app, and can request as many withdrawals as you like without it affecting your rate. 
Learn more: ISAs explained

Do you want to withdraw or transfer?

If you’ve found a Cash ISA with a more competitive interest rate, better app, or stronger customer service, you could switch from your current ISA to the new one. You’ll need to request an ISA transfer instead of withdrawing your money yourself. That’s because any money you withdraw manually will lose its tax-free status. This means that any deposits you made in previous tax years will count towards the current tax year’s ISA allowance. This could mean that it might even exceed your maximum annual allowance, meaning you’ll need to keep some of the funds that were previously tax-free in a traditional savings account or current account, where the interest may be taxed.

It’s usually easy to transfer funds from one Cash ISA to another. For example, if you wanted to transfer to the Tembo Cash ISA. To get started, simply download the Tembo app, open a Cash ISA, and select the ‘transfer funds’ option during the onboarding process. Your work is done. We’ll take it from there! 

Learn more: Is an ISA better than a pension?

How to withdraw money from a Cash ISA

It all depends on the type of Cash ISA you have and how you manage your account. Most providers let you manage your account and request a withdrawal online, but some may insist you give them a call, send an email or even visit a branch. More modern providers let you manage your account from an app, which makes it easy to request withdrawals wherever you are. With a Tembo Cash ISA, accessing your money couldn’t be easier. You can request a withdrawal in seconds using the Tembo app, just follow the steps below:

1. On the app's homepage select Cash ISA in the My account section
2. Scroll all the way to the bottom and select Withdraw to choose how much you want to withdraw from your available balance.

Withdrawing from other Tembo accounts, please consult these guides:

👉 How do I withdraw money from my Tembo Fixed Rate Cash ISA?

👉 How do I withdraw money from my Tembo Lifetime ISA to buy a home?

Keep in mind that any money you withdraw from your Tembo Cash ISA will still count towards your total ISA allowance. If you use up your full £20,000 ISA allowance this year and make a £10 withdrawal, for example, you can’t replace the money in the same tax year. You’d need to wait until the following tax year before making any additional deposits in your ISA.