How many ISAs can I have?

A shake-up of ISA rules has given savers and investors more flexibility with the tax wrapper. So, how many ISAs can you have, and can you open more than one ISA in a tax year?

Previously, ISA savers and investors could only put money into one cash ISA and one stocks and shares ISA each during a tax year.

But from 6 April 2024, you can now open more than one of the same type of ISA during a tax year, as first announced by former chancellor Jeremy Hunt in his Spring Budget last March.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

The changes, which kicked in during the 2024/25 tax year, mean savers who hold a cash ISA or stocks and shares ISA can subscribe to more than one of the same type within a given tax year – but there’s a catch.

The change is not mandatory and many major savings providers have decided not to offer the reforms.

So, it’s essentially up to your ISA provider if they want to implement the new rule.

In the midst of other ISA changes that came in at the start of this tax year, this one could prove beneficial for thousands of cash ISA holders, as it means just like a traditional savings account, savers can keep on top of grabbing competitive rates without the hassle of transferring their money.

And it means investors can shop around for the best investment platform to host their stocks and shares ISA.

We dive into how the new rule works, and which banks and ISA providers have welcomed the new ISA rule.

How many ISAs can I open in a year?

Before the 2024/25 tax year, ISA holders were only permitted to open or pay into one ISA of the same type within a given tax year.

If you wanted to switch over to another ISA of the same type, previously you would have had to check if your current provider would allow your funds to be transferred to the new provider – and not all ISA providers offer this.

But, since 6 April 2024, those who hold a cash ISA or stocks and shares ISA can subscribe to more than one in a tax year. So, if you're wondering, can I open two cash ISAs in one year, the answer is yes, the government's ISA rules will allow it. However, your bank or building society may not allow it - as we explain later.

Plus, there's also been a change to ISA transfers. Before 6 April, if you wanted to transfer your funds to another ISA, it would have had to be the full amount. Since the 2024/25 tax year began, you can now partly transfer funds. But, you will also have to check that your provider offers this.

While your £20,000 tax-free allowance remains the same, the new rule means you can spread it across various ISA providers and accounts of the same type within your limit.

Which banks are allowing customers to take up multiple cash ISAs? 

As mentioned, it’s up to the ISA provider whether they want to take on the new ISA reforms and offer the rule change to their customers.

MoneyWeek asked a range of high-street banks and building societies whether they accept applications from ISA holders who already hold a cash ISA elsewhere, or with them.

So, of the ISA providers we asked, only TSB, Nationwide Building Society, Skipton and Yorkshire building societies are offering the ISA reform. It means between these four providers, you can open multiple ISAs of the same type.

For example, if you have a fixed cash ISA with Nationwide, but months later you see TSB is offering a better rate, you can open a cash ISA with TSB without having to close or transfer the funds from your Nationwide account.

It's a shame that almost 10 months after the rule change came in, big banks like Barclays, HSBC, Lloyds, NatWest and Santander are still telling customers they can only have one type of each ISA.

A few other ISA firms allow customers to hold multiple accounts, for example opening two cash ISAs in the same tax year. Savings and investment app Moneybox confirmed it has taken the new ISA rule on board.

Investment firm Hargreaves Lansdown launched a cash ISA platform a year ago, under its Active Savings platform. The platform acts as a one-stop shop for savers to take advantage of competitive rates, without the hassle of always switching.

HL offers three types of cash ISAs - easy-access ISAs, fixed ISAs and limited-access ISAs, and under the new rules, it allows savers to hold more than one cash ISA per tax year.

Which investment firms are taking the new rule on board for stocks and shares ISAs? 

The ISA change also applies to stocks and shares ISAs, but which fund supermarkets have welcomed the new ISA rule?

Hargreaves Lansdown (HL) told MoneyWeek: “In line with the changes to the ISA rules implemented from 6 April, clients can open/contribute to a stocks and shares ISA with HL and an alternative provider in the same tax year.”

Investment firm Interactive Investor said under the new rules, you can open and contribute to stocks and shares ISAs with other providers in the same tax year too.

AJ Bell has also confirmed that it is allowing subscriptions to multiple ISAs.

A spokesperson from Fidelity told MoneyWeek: “In order to ensure clients continue to have the widest possible choice, Fidelity has removed the requirement that ISA account holders only contribute to a single stocks and shares ISA within a tax year.”

Brian Byrnes, head of personal finance at Moneybox, says allowing investors to have more than one stocks and shares ISA will give them more choice and freedom, adding that the rule change should encourage ISA holders to shop around and look at the providers' different features and costs.

Is now a good time to open an ISA? 

It is never too late to start saving or investing.

If you’re looking to open a stocks and shares ISA, research by HL shows early bird investors are better off, although you can usually still make money over the long term whenever you begin.

The data shows that if you invested your full ISA allowance in the Legal & General International Index fund on the first day of each tax year for the past 10 years, you would have received a return of £360,500 – £38,000 more than if you invested on the last day of the tax year.

Myron Jobson, senior personal finance analyst at Interactive Investor, echoes this: “Countless research shows that the early bird gets the worm. Investing early allows your investments more time in the market to potentially grow over the course of the year, benefiting from compounding returns.”

It may also be a good time to open a cash ISA right now - you'll escape paying tax on any savings interest, plus if you fix for a year or two you'll be able to grab a decent rate before interest rates are potentially cut by the Bank of England. It's predicted that the base rate could be reduced twice this year.

The best easy-access cash ISA currently pays 5.1%. The top one-year fixed-rate ISA pays 4.55%.

Right now it might seem like the easy-access cash ISA is offering a more attractive rate, but this is variable and could drop, especially if the base rate is cut.

In contrast, the return on a fixed-rate ISA won’t change within the term you’ve fixed for. So, in the longer term, you could potentially get a better return overall with a fixed ISA.