Top Cash ISAs Discussion Area

grownuptoo

Can someone tell me.....do I pay tax on the interest my interest makes? It may seem daft but I know about yearly allowances but what happens to the interest I make each year? If I leave it in the ISA account is it interest free too?

Lokolo

grownuptoo wrote: »

Can someone tell me.....do I pay tax on the interest my interest makes? It may seem daft but I know about yearly allowances but what happens to the interest I make each year? If I leave it in the ISA account is it interest free too?

Yes it is! And it doesn't count towards allowance! Yipeeeeee.

grownuptoo

Thanks for quick reply.
I need to move last years from egg as rate is terrible and also still to put away this years.
I'm fortunate as I won't need to touch it at all (unless somrthing drastic happens) what's the best going at the moment? but must be safe safe safe as I can't afford to risk it at all. Would prefer to do by phone or online.

Baldur

grownuptoo wrote: »

Can someone tell me.....do I pay tax on the interest my interest makes? It may seem daft but I know about yearly allowances but what happens to the interest I make each year? If I leave it in the ISA account is it interest free too?

As Lokolo says it is interest free - and remains so for as long as the ISA scheme lasts (as long as it's not withdrawn from the ISA wrapper), so every new tax year, as well as earning interest on any new ISA subscriptions, you can be earning interest...on interest...on interest, etc.

Lokolo

grownuptoo wrote: »

Thanks for quick reply.
I need to move last years from egg as rate is terrible and also still to put away this years.
I'm fortunate as I won't need to touch it at all (unless somrthing drastic happens) what's the best going at the moment? but must be safe safe safe as I can't afford to risk it at all. Would prefer to do by phone or online.

Would you want a fixed rate for a year rather than keeping an eye on interest rates?

If so Halifax are ok for beginners to the place.

http://www.halifax.co.uk/savings/fixed-rate-isa.asp

But the rates aren't too good.

-SEE BALDURS RESPONSE BELOW, he has a better one.

Baldur

See the best ISA post (scroll down for fixed rate ISAs which accept transfers).

Northern Rock are offering 3.2% from £500 until next September, if 100% safety is your requirement but there are others which I would consider first, personally.

grownuptoo

Baldur wrote: »

Northern Rock are offering 3.2% from £500 until next September, if 100% safety is your requirement but there are others which I would consider first, personally.

I want to make as much as I can as it's to last into my old age so it needs to be safe but also it needs to keep up with inflation. The rates seem so bad now compared to a year ago so don't know if I should tie it up for bigger return or wait and see if rates come back up later.

What ISA would you recommend?

Baldur

grownuptoo wrote: »

I want to make as much as I can as it's to last into my old age so it needs to be safe but also it needs to keep up with inflation. The rates seem so bad now compared to a year ago so don't know if I should tie it up for bigger return or wait and see if rates come back up later.

What ISA would you recommend?

I wouldn't recommend a specific ISA it's your choice - I would say that your aims of keeping up with inflation are unrealistic UNLESS you monitor your rates at least annually and are prepared to possibly transfer regularly - very few Cash ISAs/Savings accounts carry any sort of guarantee (e.g. interest being linked to the BoE base rate) beyond a year or two at most and those that offer any guarantee are very much in the minority and are often not among the best rate payers.

Personally, I wouldn't fix for more than a year at the moment - preferring to have the flexibility to assess the best rates next year when most of my current FRISAs mature.


<Edit> As far as Northern Rock's 100% security status is concerned, I have no idea what effect this news report may have.

grownuptoo

Thanks for advice, I'm happy to review regularly, it's coming to a decision that I find so difficult but then I suppose doing nothing is not good either.

I'll look at link you posted again and try and make a decision

Thanks for all your advice

samk1989_2

hi i'm a student living at home and have some money just sitting in my student bank account (Halifax). What can i do to make the most of the money???

please send me a private message