New to ISAs, Query

ceminem

Ive been looking all over for an answer to this question but with no luck.

WIth ISAs can you only have £3000 in them each tax year or do they cumulate the next year

e.g.

Yr1 £3000
Yr2 £3000

OR

Yr1 £3000
Yr2 £6000 etc

If someone could explain that to me I would be very greatful!

isasmurf

You can put £3,000 into a Mini Cash ISA each year on top of any money that is already in the ISA. The rules are on what goes into the account each year, not what is in there.

E.g.
Yr 1 deposit £3,000
End of Yr 1 £150 interest = balance £3,150
Yr 2 deposit £3,000 balance £6,150
End of Yr 2 £307.50 interest = balance £6,457.50
etc..

ceminem

So that means Ive missed out on the previous years allowances, I only just opened my cash ISA

surfcat

yep, unfortuantely you have.

That's why it's important to make the ISA the first place you save, and the last place you raid in emergenices.

ManAtHome

Just to add to Surfcat's info - it's the last place to raid as you can't top it up again if you withdraw cash. You are allowed to make deposits of up to £3k per tax year - if you put £3k in then withdraw £1k, you cannot replace the £1k in that tax year (it's not an end of year balance limit, it's a paying cash in limit).

bingobango_3

good question though ceminem, I too have to say that advice is not clearly explained elsewhere.