Savings Interest Per Tax Year

harrpau7

Quick question, is yearly Interest on savings account calculated ourely on the money out in during the year or for all funds in the account?

EG - Tax Year 1 - £5,000 put in Savings
Tax Year 2 - £5,000 put in Savings

At the end of tax year 2, would my interest be calculated on the £5,000 put in the a/c in tax year 2 or would I also get interest for the £5,000 put in for tax year 1 (totalling interest for the full £10,000).

Thanks

jem16

harrpau7 wrote: »

At the end of tax year 2, would my interest be calculated on the £5,000 put in the a/c in tax year 2 or would I also get interest for the £5,000 put in for tax year 1 (totalling interest for the full £10,000).

Thanks

It's calculated on the full amount, so £10k.

Save in ISAs and there is no tax to pay.

evenasus

If there was £5000 say @ 3% put in the account for the full 12 months, you would receive interest of £120 interest, if basic rate tax payer.

Year two, you add another £5000, so total amount in the account £10,120. You would, at the end of year two receive interest of £242.88.