Does interest count in cash ISA max amount

alsace-dave

I've taken out a 5 yr fix rate Cash ISA with Birmingham Midshires at 4.25% interest. I'll get £216.75 interest in 12 months time, paid into my cash ISA account. Does that mean that next year I can only invest £4883.25 in this cash ISA (5100 - 216.75)? assuming of course that £5100 will be the max limit again next year.

Lokolo

Interest doesn't count towards allowance. Only cash you deposit.

Funkyfreddy

alsace-dave wrote: »

I've taken out a 5 yr fix rate Cash ISA with Birmingham Midshires at 4.25% interest. I'll get £216.75 interest in 12 months time, paid into my cash ISA account. Does that mean that next year I can only invest £4883.25 in this cash ISA (5100 - 216.75)? assuming of course that £5100 will be the max limit again next year.

No - interest that is earned through the year and credited to your account has no effect to your ISA allowance. Providing your 5yr FRISA allows you can deposit the maximum allowance into it for 2011/12 and susiquent years.

Are you sre you can add to it in future years if they withdraw it ?

The ISA allowance for 2011/12 is due to increase inline with inflation rates - how/when that is fixed I dunno.

FF

Stompa

Funkyfreddy wrote: »

Are you sre you can add to it in future years if they withdraw it ?

Assuming it's this one:

http://www.bmsavings.co.uk/savings/isa-savings/659/5-year-fixed-rate-isa-annual-interest.aspx

then:

3.1 You can pay all or part of your yearly Cash ISA allowance into your 5 year fixed rate ISA until we stop selling it.