ISA Advice

harty999

Hi folks i am sorry for posting this really dumb question in advance but i hope you can help.
I did ring my bank today and ask them but tbh it appeared the person had no idea. So i thought i would go to the place that never lets me down.
I opened a 1 year ISA last June. I have recently filled it up to the maximum allowed then withdrew a few hundred to put back in a week later. Which i didnt realise i couldnt do
I currently have £4990 in my ISA.
My question is can i withdraw the full amount now to pay off a high interest bill and if i do this would i still be entitled to the interest i have gained from June last year until now.
Also what would the interest be i have added £1k every few months to build it up.
Thanks for the advice folks and i am really sorry for the dumb question. This is my first year trying to make proper savings so its all new to me. It was a standard Halifax online isa.

dtsazza

harty999 wrote: »

I opened a 1 year ISA last June. I have recently filled it up to the maximum allowed then withdrew a few hundred to put back in a week later. Which i didnt realise i couldnt do

You're right - as you say, the limit is for the total amount of payments in (and withdrawals don't bring this back down).

I currently have £4990 in my ISA.
My question is can i withdraw the full amount now to pay off a high interest bill and if i do this would i still be entitled to the interest i have gained from June last year until now.

Whether you can withdraw it, and what interest you will be entitled to, depend on the terms and conditions of the specific account.

A very few accounts are properly fixed-term, in that you can't get your money out before the end at all. Most fixed-rate accounts do allow early withdrawals but you typically forfeit interest in order to do so. And instant-access accounts allow you to take money out whenever.

Also what would the interest be i have added £1k every few months to build it up.

Well the interest gets calculated daily (each night one 365th of the yearly interest is accrued). This will obviously be higher in later months than earlier months, so the exact amount depends on when you paid the various amounts.

And of course it depends on the interest rate too! Let's assume it was 3.65% for convenience, which means that every day you accrue 0.01% of the total as interest - or 10p/day for each £1000 in the account. So if you had £1000 for 90 days, then £2000 for 90 days, etc... you would earn:

£0.10 * 90
+ £0.20 * 90
+ £0.30 * 90
+ etc...

which over the first year would be £90.

(An alternative way to work it out is that your average balance over the year was around £2,500, and 2500 * 3.65% = £91.25)

As I say, without knowing the exact interest rate or what your balance was on different days, it's hard to say for sure - but this is the order of magnitude you'd be earning over a year. Since you've had yours for 8 months it would be more like £60, perhaps a bit less since the interest rate would likely be a little lower.

This is my first year trying to make proper savings so its all new to me. It was a standard Halifax online isa.

There isn't necessarily a "standard Halifax online ISA", FWIW. They currently offer three different types of ISA (an the fixed-rate version comes in five different durations each with different interest rates). And they probably did offer different accounts - or at least different interest rates - last June.

So if you wanted a more detailed/specific answer, you'd need to supply both the full name of the account (which would be something like "ISA Saver Direct") along with the date you opened it, or the issue number if you know that.