Isa question

Financially_Clueless

Hi guys, sorry to trouble you but I've recently opened up a cash e-ISA with HSBC. Long story short, I had a lot of money in my standard account and wanted to move some of it to get interest etc instead of it just being there doing nothing.

On reading through the ISA information I've noticed that there's a limit (£5640 I think) that you can put in an ISA each year tax free/protected. What happens if I go above this?

It's a monthly interest and I got £1.93 from £4500 last month which to me seems very low as i was expecting 1.69%. As it stated variable does that mean it can just change like that?

I'm not too bothered about the wheeling and dealing to get the best deals as all I want is a place for my money to go to gain interest and have access to at anytime if needs must.

From all these questions I have asked has my ISA in affect just changed to a very low interest savings account? What should I do to get the best out of my money? (Just out of interest)

Thanks for any help you can give guys, FC

Lokolo

Financially_Clueless wrote: »

Hi guys, sorry to trouble you but I've recently opened up a cash e-ISA with HSBC. Long story short, I had a lot of money in my standard account and wanted to move some of it to get interest etc instead of it just being there doing nothing.

On reading through the ISA information I've noticed that there's a limit (£5640 I think) that you can put in an ISA each year tax free/protected. What happens if I go above this?

First a warning from HMRC. Then maybe a fine. Then (unlikely) jail sentence.

It's a monthly interest and I got £1.93 from £4500 last month which to me seems very low as i was expecting 1.69%. As it stated variable does that mean it can just change like that?

Yes it can change just like that, but the interest rate hasn't changed. Did you have £4500 in the whole month? You get interest based on the average amount you had in the account, not the end amount.

Financially_Clueless

Lokolo wrote: »

First a warning from HMRC. Then maybe a fine. Then (unlikely) jail sentence.



Yes it can change just like that, but the interest rate hasn't changed. Did you have £4500 in the whole month? You get interest based on the average amount you had in the account, not the end amount.

How come there are options for putting in £15,000+?

It was just a lump sum put in straight away.

Thank you for your response.

Lokolo

Financially_Clueless wrote: »

How come there are options for putting in £15,000+?

It was just a lump sum put in straight away.

Thank you for your response.

The limit is the amount you can deposit per year. So after 10 years or whatever, you can have £15,000 in. Just not all in your first year.

What date did you put in the money and what date was interest paid?

Financially_Clueless

Lokolo wrote: »

The limit is the amount you can deposit per year. So after 10 years or whatever, you can have £15,000 in. Just not all in your first year.

What date did you put in the money and what date was interest paid?

Paid in on 18th March. Interest paid on 27th March.

I'm sorry if this is really stupid but thought this would be the right place to get some answers from people who know more about it then I do.

Financially_Clueless

Should I have just got a Savings Account?

penrhyn

Next week you can stick another £5760 in your cash ISA, as it will be sthe start of the new tax year.

Financially_Clueless

penrhyn wrote: »

Next week you can stick another £5760 in your cash ISA, as it will be sthe start of the new tax year.

Cool, cheers. I get that now (luckily) having read more about it. What's the difference between a cash ISA and a savings account? (Stupid question alert)

Financially_Clueless

If anyone can tell me what the calculation is (to get the interest percentage) for me getting £1.93 in 9 days from a cash ISA, Having just put in a lump sum of £4500?

R_P_W

a cash ISA is a savings account, the difference being you don't pay tax in the interest.

£1.93 is probably about right for that period of time. what were you expecting?

Shaolin_Monkey

I believe interest is calculated daily and compounds daily, so to calculate daily interest its roughly 1.69% divided by 365 (because its an annual rate) x the balance of the account. It's about 20-21p per day by my very rough calculation

I'm sure someone can give a more definitive calculation.