How many ISAs are allowed for me?

Savers are now able to open and fund multiple ISAs of the same kind thanks to new ISA regulations

Does this change apply to everyone? We examine the maximum number of ISAs that can be held during the current tax year.

Investors and savers now have more options with the tax wrapper thanks to changes made to the ISA rules. You can open more than one ISA in a single tax year, but how many can you have?

Only one cash ISA and one stocks and shares ISA could be funded by ISA investors and savers each tax year.

In April 2024, however, Jeremy Hunt, the former chancellor, announced in his Spring Budget last March that you could open more than one of the same type of ISA during a tax year.

The modifications, which went into effect in the 2024 - 2025 tax year, allow savers with cash or stocks and shares ISAs to subscribe to multiple of the same type within a single tax year, but there is a catch.

Some savings providers have chosen not to implement the reforms, and the change is not required.

In essence, the decision to apply the new rule rests with your ISA provider.

Thousands of cash ISA holders may benefit from this change, which happened amid other ISA changes during the 2024 - 2025 tax year. It means that, similar to a traditional savings account, savers can continue to take advantage of competitive rates without having to deal with the inconvenience of money transfers.

Also, it implies that investors can compare platforms to find the best one for hosting their ISAs for stocks and shares.

The new ISA rule has been embraced by banks, building societies, and stock and share ISA providers. We explore how the new rule operates.

In a year, how many ISAs can I open?

ISA holders were only allowed to open or make payments into one ISA of the same type during a single tax year prior to the 2024 - 2025 tax year.

It was previously necessary to confirm whether your current provider would permit the transfer of funds to the new provider if you wanted to switch to another ISA of the same kind, and not all ISA providers provide this option.

It has been possible to enroll in multiple cash or stocks and shares ISAs during a single tax year since April 6, 2024.

In addition, ISA transfers have changed. Transferring funds to another ISA prior to April 6th would have required the full amount. You can now partially transfer funds since the start of the 2024 - 2025 tax year. You must, however, confirm that your provider provides this as well.

You can now divide your 20,000 tax-free ISA allowance among multiple ISA providers and accounts of the same kind, as long as you stay within your limit, according to the new rule.

Can I open two ISAs with cash in a single year?

In the same tax year, you can now open two cash ISAs. If you'd like, you could open more accountsfour cash ISAs, for instance. In any given tax year, you can also open two or more stock and share ISAs.

However, keep in mind that lifetime ISAs are exempt from the new regulations; you are only allowed to contribute to one lifetime ISA per tax year.

Also take note that these new regulations must be permitted by your ISA provider for multiple cash ISAs or stocks and shares ISAs. Customers are allowed to open multiple ISAs of each type each tax year, and providers are not required to update their systems.

In a given tax year, which banks and building societies permit their clients to open multiple cash ISAs?

As previously stated, the decision to implement the new ISA reforms and make the rule change available to their clients rests with the ISA provider.

The BFIA questioned several high-street banks and building societies about whether they would accept applications from ISA holders who already had a cash ISA with them or somewhere else.

Is this the right moment to open an ISA?

You can start investing or saving at any time.

Research from HL indicates that early bird investors do better when opening a stocks and shares ISA, though you can typically still make money in the long run no matter when you start.

Additionally, now might be a good time to open a cash ISA because you won't have to pay taxes on any savings interest and, if you fix for a year or two, you won't be impacted by any future interest rate reductions by the Bank of England. It is anticipated that there may be two more base rate reductions this year.