How does interest calculation works for a Cash ISA containing contributions from multiple years?

wisdenfan

Hoping to tap into the collective wisdom of the forumites here. I have a question regarding an easy access cash ISA that covers contribution from multiple tax years. I have an existing easy 

access cash ISA which I have opened during tax year 2024/25 and so far I have saved £10,000 in it. The interest in this account is calculated and deposited on a daily basis. I'm in the process of 

transfer another of my cash ISA (which was opened during tax year 2023/24) into this existing easy access cash ISA. The transfer value will be a total of £20,500 (£20,000 of my 

original savings plus the £500 of interest acrued so far).

Obviously, once the transfer is completed, the interest will be calculated on my total savings, i.e. it will be calculated on on £30,500 (£10,000+£20,500) instead the original £10,000 (as per my calculation, at an effective daily rate of 4.97%, I'll be earning £4.15 of interest daily instead of £1.36).

My question is, let's say in 3 months time, I would like transfer out only the 2023/24 part of my investment and the associated interest accrued over those 3 months, only for the 2023/24 savings (the total sum should be £20,500 plus the accrued interest of around £252.75), how would the receiving bank know that all the money that I'm transferring out is part of the previous tax year's Cash ISA savings and it has nothing to do with the current tax year's allowance?    

Any pointers here will be highly appreciated.

Mark_d

I don't imagine it would matter if you transferred 20k or 21k.  The restriction with ISA is how much you can pay-in during each tax year.  Transfers are not new money so there shouldn't be an issue.