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How does ISA interest work?
chriiiiiiiis
Posts: 226 Forumite
Hello.
I have just opened my first ISA (Barclays Tax Haven ISA) for the 2008-09 tax year.
I don't have a clue about them. I only know that they are beneficial.
The Barclays website says that the interest is 6.50% AER/6.31% Tax free, paid monthly. What does this mean? Would I make more interest by paying the £3600 in the first month, and then just leave it there for the whole 12 months? Or would it not make any difference whether I made 12 equal monthly payments which totalled to £3600?
I do not intend to transfer ISAs or whatever at the end of the tax year, because I don't like the hassle, and I wouldn't understand how it worked anyway.
I don't know how interest works, I wish I did. I have about £150 per month spare from my wages, and I just leave it in my current account.
I am sorry to ask these questions, and I know you probably get asked them all the time. Don't get me wrong, I think I am a bright person, but I'm new to ISAs and stuff.
If somebody could enlighten me, I would be eternally grateful (eternally, really!)... and I could pass the knowledge on to my family who don't have a clue about this type of thing either.
I have just opened my first ISA (Barclays Tax Haven ISA) for the 2008-09 tax year.
I don't have a clue about them. I only know that they are beneficial.
The Barclays website says that the interest is 6.50% AER/6.31% Tax free, paid monthly. What does this mean? Would I make more interest by paying the £3600 in the first month, and then just leave it there for the whole 12 months? Or would it not make any difference whether I made 12 equal monthly payments which totalled to £3600?
I do not intend to transfer ISAs or whatever at the end of the tax year, because I don't like the hassle, and I wouldn't understand how it worked anyway.
I don't know how interest works, I wish I did. I have about £150 per month spare from my wages, and I just leave it in my current account.
I am sorry to ask these questions, and I know you probably get asked them all the time. Don't get me wrong, I think I am a bright person, but I'm new to ISAs and stuff.
If somebody could enlighten me, I would be eternally grateful (eternally, really!)... and I could pass the knowledge on to my family who don't have a clue about this type of thing either.
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