ISA Interest confusion

Bikerpete

I have ISA accounts with A&L and NSandI both of these are earning almost nothing at the moment.

I intend to invest in another ISA for 2009/10 asap, with the full allowance. And hopefully transfer the previous 2 years ISAs to the same account.

OK, so I am reading through all the info I can find about the best Direct ISA I can get.
Then a thought comes into my mind regarding the interest earned on the last 2 years ISAs.

Am I correct in assuming that the interest earned on these in previous years can stay in the account and earn more interest without putting me over the top as regards this years allowance?

All I want to do is consolidate my savings and reduce the number of accounts I have to play with, I am currently dealing with 6 different banks and umpteen accounts. Its doing my head in, I think I will just get all my cash and prop the bed up with it.

Any advice welcomed.

Jonbvn

The interest does not effect your ISA allowance.

alastair_h

Bikerpete wrote: »

Am I correct in assuming that the interest earned on these in previous years can stay in the account and earn more interest without putting me over the top as regards this years allowance?

Yes correct, the interest compounds up with the deposit.

All I want to do is consolidate my savings and reduce the number of accounts I have to play with, I am currently dealing with 6 different banks and umpteen accounts. Its doing my head in, I think I will just get all my cash and prop the bed up with it.

If it makes life easier then yes move all your ISA's together, if you have a lot invested (more than the £50K FSCS guarantee) or are nervous about putting all your egg's one basket you could split the up into 2 or 3 smaller ISA blocks even fixing the rate on one or two while still having access to one if you needed access to it.