Cash isa new too question's

NotRichAtAll

Hi, i have been lazy with my savings and left my cash in various interest bearing bank accounts, Chase Kroo Marcus.

Anyway last night i opened a cash isa with Kroo and put 5k in it, from what i can gather i have a 20k allowance so was going to open another cash isa with marcus and put 15k in that.

Now where i need help, at the end of the isa term do i need to remove any interest earned from the isa's?
if we have 20k allowance next year do i just rinse and repeat the 5k and 15k meaning each isa would have 10k and 30k in them or do i need to empty them and start with 5k and 15k again keeping in the 20k limit.

sorry if this is confusing.

thank

XzavierWalnut

You do not have to remove the interest, it can stay in the ISA.
Yes you can add another £20k next tax year into the same accounts or new ones.
There are rumours Rachel Reeves may reduce the amount you can put in to £4k at some point.

Zanderman

The 20k allowance is how much you can put into an ISA each year.

It is not a limit on how much can be in an ISA. 

So as the ISA earns interest the interest can stay there, even if the total then exceeds 20k.

And next year you can leave the 20k and the interest, in the ISA(s) if you want.  And you can add up to another 20k in that/those ISA(s), or another ISA. (the 20k limit may reduce if the rules change)

All interest, paid whilst in the ISA, is tax free. So unless you need the money in following years it probably makes sense to leave it in the ISA, rather than take it out and put it in an ordinary savings account.

Bear in mind, of course, that to be worthwhile the ISA interest rate needs to beat the interest rate on ordinary savings accounts after tax. Some non-ISA accounts are better bets than some ISAs. And remember that that you do have a tax-free allowance on ordinary savings accounts too.

friolento

There is a good MSE ISA guide: https://www.moneysavingexpert.com/savings/best-cash-isa/

And an excellent MSE ISA user forum: https://forums.moneysavingexpert.com/categories/isas-tax-free-savings