Confused about my ISA

JimLad

I have an ISA that I opened with Abbey a month ago which is now paying just 4%. This isnt much less than the highest so I cant be bothered to change.

Where my question lies is with the interest on my £3600…

When a year comes around and I get my 4% interest of £144, will that just get put into the ISA as well? Making a total of £3744?

Then in the following tax year, can I still invest another £3600? Or is it £3456?

Thanks in advance for your help.

Jim the newbie saver

Just_landed

JimLad wrote: »

can I still invest another £3600? Or is it £3456?

Jim the newbie saver

Being a cash ISA interest is locked into the wrapper, so you can save another £3600.00 the next financial year.;)

molerat

Whether the interest is re-invested into the ISA will either be a choice you will have made or depends on the T&C's of the ISA.

If it is re-invested you will still be able to put the full £3600 in next year.

Baldur

Interest earned is irrelevant to the annual Cash ISA allowance, you can subscribe £3,600 of new money (or whatever subsequent amount which may be permitted under the ISA rules) to a Cash ISA each tax year, irrespective of how much interest your previous year's/years' Cash ISA funds have earned.