Best way to earn interest with 6k?

tom188

I think you are getting confused with definitions.

A cash ISA is just a savings account.
ISA = Individual Savings Account.

faithless

RobLondon1984 wrote:

I have read the link and still unsure how it works.

If you say you are allowed one ISA from april till next april. I opened a 1k ISA in august, then I would be earning interest till next august? as you say interest is added when you opened your account? would I need to wait till next august to open another 3k ISA?
Thanks

tom188 wrote:

I think you are getting confused with definitions.

A cash ISA is just a savings account.
ISA = Individual Savings Account.

Yeah, an ISA is basically a certain type of savings account, that has the benefit of being tax free (i.e. no tax is deducted off the interest paid to you). This savings vehicle is subject to statutory limits on the amount you can put in, because of the tax free benefits. The limit is £3k per person per annum (for mini cash ISAs). So you can save £3k per tax year in a mini cash ISA. The limitations on the amount of money you can put in are set by the government, and otherwise have no effect on the running of the account, so interest and everything else is calculated just as in a 'normal' savings account- i.e. interest is calculated daily from when you open the account, based on the amount of money you have in on that day - if you add more money then the interest will be calculated based on the new amount of money you have in the account, from the day the money goes into the account, and if you took money out from the account, the interest would be calculated on the new, lower balance from the day you removed it.