How to Convert Cash ISA to Shares

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How to Convert Cash ISA to Shares
Funds can be transferred from a cash ISA to a stocks and shares ISA, but you cannot move monies from the latter to the former. (stocks and shares image by Andrew Brown from

ISAs (Individual Savings Accounts) are products that enable citizens of the United Kingdom to save or invest a set amount of money each year on which the interest gained is exempt from tax. Two kinds are available: cash ISAs and stocks and shares ISAs. The former is simply a tax-free savings account, while the stocks and shares ISA enables exposure to the stock market. You can transfer money from a cash ISA to a share ISA, but not vice versa.

Skill level:


  1. 1

    Research thoroughly the available stocks and shares ISAs into which you can transfer your cash. Some may charge a fee for acceptance of a transfer while others may have restrictions on access to your capital (asking you to "lock" it away for a certain time and levying a fee if you withdraw prior to completion).

  2. 2

    Assess the two different forms of stocks and shares ISAs, namely, one in which you do the investing and one in which the provider does so. If you have confidence in buying and selling stocks you can do so and simply place your holdings (up to the allowed limit) within the protection of an ISA. Alternatively, the ISA provider will invest in shares for you. This is less time-consuming but you have no say as to which stocks your money goes into.

  3. 3

    Consider that while stocks and shares ISAs do have the potential to accrue larger gains for your investment than the cash equivalent, their success is dependent upon the performance of the stock market. The value of your investment can decrease as well.

  4. 4

    Decide which ISA you wish to transfer to and contact the service provider. You do not need to contact your current provider; the tranferee will do so on your behalf.

  5. 5

    Analyse the performance of your stocks and shares ISA at the end of each tax year. You may wish to transfer to a different shares ISA if yours is not performing as expected, although, of course, be aware of any fees that transferring again might entail.

Tips and warnings

  • If you are transferring between service providers within a single tax year, you must transfer all of your cash ISA capital. If transferring from previous years, you may be able to perform a partial transfer, although the service provider may have restrictions on this.
  • You can also withdraw the capital from your cash ISA and invest it in shares outside of a stocks and shares ISA. However, you will have to pay tax on the interest accrued on the profits.
  • Once the switch to the stocks and shares ISA has been effected, you cannot then transfer the capital back to a cash ISA.
  • Do not withdraw your capital from an ISA to transfer it to another ISA. If you do, it will be considered a new investment and so use up your allowance for the current year.

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