Mini Cash Isa With Monthly Interest

theitalian

I am thinking of transferring my existing Mini Cash Isa fund into one where the interest is payed monthly in the hope that the interest earned can be deposited into my mortgage account to use to make overpayments. Is it possible to have this interest transferred to other accounts without penalty, tax, etc?

Thanks

KTF

I think all ISAs pay interest annually.

Mr_Mumble

Bradford & Bingley's eISA2 pays the highest rate (6.05%) for an account with a monthly option, minimum deposit is £1,000. Intelligent Finance offers 5.85% with a deposit of only £1. No penalties to worry about if you choose an easy access account.

GoodFun

First Direct pay monthly interest too.

Milarky

Just on this point of having ISAs and mortgages together an see this thread from post #9 on where Bernie says he can actually stick his ISA capital into an offset arrangement - where it remains ISA capital for the day in the future when he no longer has a mortgage and could benefit again from the tax free allowance. The principle means that any bank that will sell you an offset mortgage (and the rate is that much more, of course) CAN (they may not, but it is clearly allowed if IF are/were doing it) use your cash ISA capital to offset the balance on the loan. It also means that you can move other offset savings into the ISA using the annual allowance. The 'drawback' (which isn't really one) is that the ISA capital cannot increase except through the annual limits (no compounding of interest.) Still, annual allowances are up next year 20% - which is nice!

(It also means that you could effectively 'borrow' against ISA capital - even though it says in the ISA rules somewhere that ISAs may not be used for loans)