HSBC e-ISA question

brixtonian wrote: »

Hi all,
I wonder if any of you experts could help me with a question... I have an e-Isa with HSBC with a limit of £3600, i'm a newbie saver and when i opened it understood that that amount was free of tax.. I'm about to reach the amount :j and my question is.. what happens if i go over it? do i have any penalties? Can i keep putting money there or shall i use another savings account?
Thanks a lot!

£3,600 is currently the annual limit that you can put into a cash ISA during the current tax year 6th April to next 5th April. So, on the 6th April 2009, you will be allowed to put a further £3,600 in the same ISA or in a new one.

If you put more than the allowed £3,600 in this year, HSBC will probably return your money, or if they leave it in there they won't pay any interest on it.

You should open a normal savings account for any extra money you may want to put away this tax year.

Dave.

brixtonian wrote: »

Thanks a lot!
And can i be cheeky and ask another one?.. why is that that the ISA accounts are free of charge? Is there any reason? (sorry my ignorance.. just curious!)

Do you mean free of tax? The government introduced the tax-free Individual Savings Accounts to encourage the population to save more. And it seems to have had the desired effect. They obviously have to impose an annual limit on these tax-free savings otherwise the Treasury would run out of tax income :rotfl:

Dave.