ISA interest

ellie44

Hi,

I can't seem to find the answer to this very easily on Google so I thought I'd try here.
I put £10k into a fixed term cash ISA in the 2014/15 tax year. This tax year, I used up my entire £15,240 cash ISA allowance. When I set up my first ISA, it was set up so that my interest would go back ino the ISA account so I now have more than £10k in that account.

Question: is my interest legally allowed to be reinvested into my first ISA, even though I've used up my ISA allowance this year?

Thanks (from a very confused 19 year old)

xylophone

Question: is my interest legally allowed to be reinvested into my first ISA, even though I've used up my ISA allowance this year?

Yes. And check the rate you are receiving now on the 2014-15 ISA - it might be very low.

If so, you might wish to consider a transfer to a provider paying a higher rate.

Remember that you must ask the new provider to arrange the transfer.

http://www.thisismoney.co.uk/money/saving/article-1583864/Best-savings-rates-Isas-Cash-Isa-accounts-fixed-rate-Isas.html

Flobberchops

Just to clarify, does this mean interest earned doesn't count as "new money" for subscription limits?

jimjames

Flobberchops wrote: »

Just to clarify, does this mean interest earned doesn't count as "new money" for subscription limits?

Yes because it's not new money you've paid in.

But please check if a cash ISA is really the best place for your savings.

bigfreddiel

I can never understand this type of question. Surely when you set up any investment you read and understand the terms and conditions! If not why do it?

Seems crazy to me that anyone would put their hard earned cash into something they don't understand.

Is this the reason we get advisors who charge you a fortune to tell you something you can find out for yourself? Bit like asking someone the time who then charges you for the information and then uses your own watch, and of course if your watch is wrong it's not the advisors fault it's yours.

Good luck fj