how ISAs work

tiger135

I understand each tax year you have 20k ISA pot tax free. 
so year 1 i put 20k in hscb isa and at the end say its 21k but the interest rate is only for a year. 
year 2  i put 20k in natwest for a new good rate. what then do i do with the previous 21k in hsbc? 

Dazed_and_C0nfused

tiger135 said:

I understand each tax year you have 20k ISA pot tax free. 
so year 1 i put 20k in hscb isa and at the end say its 21k but the interest rate is only for a year. 
year 2  i put 20k in natwest for a new good rate. what then do i do with the previous 21k in hsbc? 

Most people would transfer it to a decent paying ISA.

You can't withdraw it and pay it back in if you have already used your £20k elsewhere in that new tax year.

Albermarle

Would be useful for you to have a look at the sub forum that is all about ISA's
ISAs & tax-free savings — MoneySavingExpert Forum

elkiedee

The allowance is for new money to pay in. You can add to the same account or open a new one. At the end of a fixed term ISA or the end of a special offer rate, you can also transfer your HSBC ISA to another ISA that accepts transfers and offers a better rate than the HSBC one at the end of an offer rate. Also, it may be that another provider offers a better rate than the HSBC even with a bonus.