Does interest compound

angelra

I am not sure what to do. I have an ISA opened last year with moneybox at 5%. I will have money to invest £20000 in a new ISA. Moneybox have opened a new ISA in 2024 at 5.11% but they will not allow 2 cash ISAs . Do I gain anything by putting my money into the same ISA or should I transfer to a new ISA with a different provider? Then open a new cash ISA with moneybox? Will my interest on first ISA be compounded by the interest achieved last year in both counts....new provider and old? Cash ISAS seem to have higher interest than fixed accounts too that I noticed

masonic

Cash ISAs work like other savings accounts. You earn interest on the balance of the account, so if you add money you'll earn interest on the new balance. Interest paid within the ISA will compound.