ISA transfer - does the interest transfer too, or just original £3000?

[Deleted User]

Sorry if this is a stoopid question, I'm new to ISA's.

I just wanted to confirm, that the interest compounds within the ISA account? I am sure I had read this when I signed up (and that this was kind of the point of the ISA!) but someone told me today that this wasn't the case, and the interest transfers out to your nominated account. I am looking at an Icesave ISA. However my friend's is with Nationwide, so perhaps its just different for each?

Also, if you transfer the ISA, does the interest transfer too, or can you only transfer the original amount ie £3000?

Thanks!!

Lokolo

The interested is usually credited to your ISA account, I think 99% of the time it will be credited to your ISA account.

If you transfer the money will be the total inc interest

[Deleted User]

Thanks!!:D

CLAPTON

often you can choose whether to have the interest reinvested or paid out.. it depends upon the particular product

if you transfer it, then the total value, capital and interest will be transferrred.

King_Weasel

Deleted_User wrote: »

I just wanted to confirm, that the interest compounds within the ISA account? I am sure I had read this when I signed up (and that this was kind of the point of the ISA!

Just to clarify: compounding isn't really the point of ISAs - any savings account, ISA or not, will pay interest on the interest if you leave it there. The point of ISAs is that the interest isn't taxed. (And a second point is that you don't have to mention them anywhere on your tax return.)