Paragon 2 YR fixed rate cash ISA...

keep_it_simple2

Hello All,
I'm looking to open one of the above cash ISA's.  I was planning to transfer my exisiting ISA savings from an existing account elsewhere.

My plan was to have the interest paid monthly into another bank account.

Whilst siging up for the account there was a statement effectively saying that if I transfer the interest monthly to another account then the interest loses its ISA status.

I'm a bit confused by this - the whole pupose of an ISA is to provide a tax wrapper - am I going to pay tax on my interest when its paid into another bank account?

I know there is a difference between a lifetime ISA and a cash ISA - does that account for it?

Many thanks for your advice.

Neil.

eskbanker

keep_it_simple2 said:

Whilst siging up for the account there was a statement effectively saying that if I transfer the interest monthly to another account then the interest loses its ISA status.

I'm a bit confused by this - the whole pupose of an ISA is to provide a tax wrapper - am I going to pay tax on my interest when its paid into another bank account?

You'd only be subject to tax on any interest income generated from whatever you pay into your non-ISA account, i.e. if you earn £50 of interest in the ISA and pay that into a current account, it's only the (say) £1 earned on that if left there for a year that would be taxable.