Interest from Icesave Mini Cash ISA.

Richard2736

Hi,

I wonder if anyone can advise me please? I have opened an icesave minicash isa.

1) What are the pros and cons of taking your interest out of the account or leaving it in? For instance if I leave the interest in will this come out of the next years £3600 limit, or will it be in addition to? I can't seem to find any details about this!

2) Also are there benefits of being paid interest monthly rather than yearly?

3) This may be a stupid question, but if I have paid in £3000 this year and £3600 next year, will I receive interest on the WHOLE (i.e. £6600) amount next year, rather than just what I have paid in, in the next tax year (i.e. £3600).

Many thanks in advance (I hope I haven't confused you! In case you hadn't guessed, I'm confused!!)
Kind regards,
Richard

Mikeyorks

Richard2736 wrote: »

Also are there benefits of being paid interest monthly rather than yearly?

Not unless you want it as 'income'. Best to leave it in and let it compound alongside the capital .... which makes a significant difference over several years.

And no, the interest doesn't count as part of your 'allowance' in any way.

raider

Richard2736 wrote: »

Hi,
For instance if I leave the interest in will this come out of the next years £3600 limit, or will it be in addition to?
Also are there benefits of being paid interest monthly rather than yearly?

The interest you earn is in addition to the £3600.

No benifits for monthly or yearly, both will pay the same at the end of the year.

raider

Richard2736 wrote: »

3) This may be a stupid question, but if I have paid in £3000 this year and £3600 next year, will I receive interest on the WHOLE (i.e. £6600) amount next year, rather than just what I have paid in, in the next tax year (i.e. £3600).

Interest is calculated on a daily basis and paid either monthly or yearly (whichever you have chosen).

So for instance, if you opened the account on 1st march and have opted for yearly interest (icesave pay yearly interest on the account anniversary), you will earn interest on the £3000 from 1st march'08 to 28th Feb'09, plus interest on the £3600 from April'08 to 28th Feb'09.

Hope that's not to confusing!

Richard2736

Thanks for the awesome answers guys!!

I understand now and I am fully in the picture!!

No longer confused!!

Thanks again!!! :T

Gambler

raider wrote: »

The interest you earn is in addition to the £3600.

No benifits for monthly or yearly, both will pay the same at the end of the year.

The only benefit of monthly is I like to see the interest being added