Two ISA terms in one account - how is interest calculated?

Philthy

Hello,

I opened my first ISA - cash - last tax year, with a couple of days to spare. The account I opted for was Barclays Golden ISA issue 3, 3.25%.

Is it correct that the account will maintain this interest rate for 12 months from the date it was first opened, regardless of the current rate of interest being offered on this product? Assuming that is correct, if I chose to pay this years allowance into the same Barclays account, would it fall under the same 3.25% rate for however long it had left to run, or earn the current interest rate independently and the returns from both terms simply be combined?

Many thanks,
Phil

The_Enforcer

The rate that applies to your account will apply equally to money invested in 10/11 and 11/12.

opinions4u

I would have thought any decent barclays rate from last year is about to drop sharply.

rb10

opinions4u wrote: »

I would have thought any decent barclays rate from last year is about to drop sharply.

I think the OP opened the account at the very end of the 2010/11 tax year, i.e. late March or early April 2011.

If that is the case, then the rate will drop in March/April 2012. Any money in the account will earn interest at 3.25% until this date, regardless of which tax year it was paid in.

Make a diary note to look for a new ISA to transfer to in late Feb/early Mar 2012!

opinions4u

rb10 wrote: »

I think the OP opened the account at the very end of the 2010/11 tax year, i.e. late March or early April 2011.

On reading again, I think you're right.

Philthy

31/03/11 when I opened the account. I'll continue paying into it and switch next year.

Thanks very much for your help guys.:)