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Cash ISA - does interest count as a deposit ?

plumcloth
Posts: 18 Forumite


Hi - I have a several years old Barclays Instant Cash ISA where the interest is paid directly into the ISA account. I would like to keep this and open a 1-year fixed Cash ISA with a lump sum.
I understand the rule is that you can only pay into one Cash ISA in a tax year, so my question is ... do the interest payments on my older Instant Cash ISA count as deposits, meaning I cannot pay into a new Cash ISA ? Hoping interest does not count as a deposit. Thanks.
I understand the rule is that you can only pay into one Cash ISA in a tax year, so my question is ... do the interest payments on my older Instant Cash ISA count as deposits, meaning I cannot pay into a new Cash ISA ? Hoping interest does not count as a deposit. Thanks.
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Comments
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No they do not.1
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No they don't
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Only money that you deposit counts towards your allowance.
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As an aside to your main question - is there any particular reason why you want to keep your Barclays Instant Cash ISA and do you know what the interest rate is ?plumcloth said:Hi - I have a several years old Barclays Instant Cash ISA where the interest is paid directly into the ISA account. I would like to keep this and open a 1-year fixed Cash ISA with a lump sum.
The version currently available (Issue 1) is only paying 1.66% on balances of up to £10k and 1.21% for anything over that, but you can get over 5% in the best easy access cash ISA accounts elsewhere so you would get between 3 and 4 times more interest by opening one of those and asking them to transfer-in the balance of your Barclays ISA.
You'd just need to make sure the new provider accepts transfers in (a few don't) and that the ISA is 'flexible' if withdrawing the money and paying it back (without it counting towards your annual ISA limit) is important to you.
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A while back, I was told by one of the banks that monthly interest did count towards allowance but annual didn't. Possibly be why not many offer monthly interest as an option.0
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I'd suggest that what the bank told you was a load of tosh.5
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refluxer said:
As an aside to your main question - is there any particular reason why you want to keep your Barclays Instant Cash ISA and do you know what the interest rate is ?plumcloth said:Hi - I have a several years old Barclays Instant Cash ISA where the interest is paid directly into the ISA account. I would like to keep this and open a 1-year fixed Cash ISA with a lump sum.
The version currently available (Issue 1) is only paying 1.66% on balances of up to £10k and 1.21% for anything over that, but you can get over 5% in the best easy access cash ISA accounts elsewhere so you would get between 3 and 4 times more interest by opening one of those and asking them to transfer-in the balance of your Barclays ISA.
You'd just need to make sure the new provider accepts transfers in (a few don't) and that the ISA is 'flexible' if withdrawing the money and paying it back (without it counting towards your annual ISA limit) is important to you.
So yes, I do know the interest rates for the Instant Cash ISA, but my strategy is to help them to make small changes, one at a time, allowing them time to adjust and understand the changes.
Thanks again.1 -
plumcloth said:refluxer said:
As an aside to your main question - is there any particular reason why you want to keep your Barclays Instant Cash ISA and do you know what the interest rate is ?plumcloth said:Hi - I have a several years old Barclays Instant Cash ISA where the interest is paid directly into the ISA account. I would like to keep this and open a 1-year fixed Cash ISA with a lump sum.
The version currently available (Issue 1) is only paying 1.66% on balances of up to £10k and 1.21% for anything over that, but you can get over 5% in the best easy access cash ISA accounts elsewhere so you would get between 3 and 4 times more interest by opening one of those and asking them to transfer-in the balance of your Barclays ISA.
You'd just need to make sure the new provider accepts transfers in (a few don't) and that the ISA is 'flexible' if withdrawing the money and paying it back (without it counting towards your annual ISA limit) is important to you.
So yes, I do know the interest rates for the Instant Cash ISA, but my strategy is to help them to make small changes, one at a time, allowing them time to adjust and understand the changes.
Thanks again.
There are still plenty of familiar high-street banks and building societies offering branch-based easy access ISAs paying 4-5% that you could point them towards, once you think the time might be right for them to make the jump
It might actually be worth seeing if they do pay interest on their savings interest and you could point out that they are worse off by having the money they've got in that Barclays Instant ISA then they would be if they had it in a normal (non-ISA) savings account and paid tax on it, which renders the ISA pointless.1 -
I have a flexible cash ISA with Skipton BS at maximum allowance.
This pays interest monthly away to my current account.
With each interest payment, my ISA allowance increases by the value of this interest, allowing me to build beyond the £20,000 limit if required.1 -
How can interest pay away affect the allowance which surely can never exceed 20K subscription net? Capital withdrawals may well increment the allowance figure (from zero if 20K reached) as they can be replaced but their system doing that with interest pay away sounds strange3
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