Quick ISA interest question

fmmendo

Hi, sorry if this is a silly question but I'm quite new to this and couldn't find answers anywhere on the web.


Does an ISA's interest change every year? How do different year's isa amounts "interact"?


Basically, 2 years ago I opened an isa with 2.25% interest and topped it up to that year's limit, and last year I did the same but with a lower interest rate of about 1.5% if I recall correctly.


I'm currently trying to figure out what to do this year, but I'm not sure how things work internally.
Do I have one pot at 2%, and another one at 1.5%, or do I have one pot that generated 2% during one year and then got topped up and generated 1.5% during the next?


Thanks

ColdIron

Almost certainly as per your last sentence, it started at 2.25% and dropped to 1.5%
ISAs are just savings accounts and they will all have different terms

eskbanker

fmmendo wrote: »

Basically, 2 years ago I opened an isa with 2.25% interest and topped it up to that year's limit, and last year I did the same but with a lower interest rate of about 1.5% if I recall correctly.

I'm currently trying to figure out what to do this year, but I'm not sure how things work internally.
Do I have one pot at 2%, and another one at 1.5%, or do I have one pot that generated 2% during one year and then got topped up and generated 1.5% during the next?

The latter, assuming it's the same variable-rate account holding both year's contributions, or the former if it was two different accounts and the rate on the first was fixed (was it 2.25% or 2%?).

The standard MSE advice applies as on pretty much every other cash ISA thread, i.e. if you're looking around for what to do this year, consider interest-paying current accounts for a higher return....

jimjames

ISAs in different banks will pay different amounts.

If you are able to pay money into the same ISA then it will probably earn the same as the existing money.

Any money in an ISA is likely to be paid a far lower rate of interest than you can get on a current account.

fmmendo

Thanks for your comments, sorry if I wasn't too detailed it my question.

I just checked my statements at home, it was a Barclays loyalty rewards ISA (2.25% with a 0.5% bonus, which then went down to 2%). And a year later I transferred another isa limit into the same account. I though it was fixed-rate, but it doesn't mention it in the leaflet.

Also, in regards to your other comments about current accounts, that's where may main 'pot' is (currently club Lloyds, but the Santander one looks interesting), the overflow goes into another (low interest, but better than nothing) saving account, until I can top up the isa.


Thanks