ISA interest questions

bigbobber

I have a question, as I'm pretty new to ISA and saving in general. I have had my money in an ISA now since september but the rate has gone down a lot.

When do I get the interest earned on that ISA? If I transfer my money to another one, will I lose that interest? Someone said i wouldn't if i transfer it. If I dont then do I get it at the end of the tax year and if so where does the money go, is it into my current ISA or my old ISA account?

Sorry for all the questions.

Paul_Herring

bigbobber wrote: »

When do I get the interest earned on that ISA?

When you transfer it or when they say you'll get it. Whichever happens first.

If I transfer my money to another one, will I lose that interest?

No. When you transfer it, the old bank will calculate the interest due pro-rata[1], add it on to the capital, and it is that sum that will be transferred[2]

Someone said i wouldn't if i transfer it.

Some institutions impose interest penalties for withdrawals and/or transfers. This is the only way you'd lose interest on transfer.

If I dont then do I get it at the end of the tax year and if so where does the money go, is it into my current ISA or my old ISA account?

Given my previous answers, neither, since you'll have already received any interest due from the old bank on the transfer date.

[1] e.g. if you've held it there for 6 months, you'll get ~1/2 the interest you'd've expected had you held it for the 12 months.
[2] On the transfer form, ensure you request the 'full amount plus any interest' option - do not specify a figure you think to be the capital plus expected interest.