newbie ISA confusion

No, you can get tax free interest on it year after year

You can keep the one you have and start another (you might do this if another company offers better rate, although a pain to keep track on multiple accounts) or put another 3K in the one you already have so you will have 6K + interest

Not to my knowledge

One thing to look out for if you want to move companies is to specifically say you want to transfer your funds from one ISA to another otherwise you will just be paid in cash and will have lost all previous privs and will have to start again

There are plenty of web sites explaining cash ISA s, such as Motley Fool

You can cash it in at any time if you want, but then you lose that tax allowance for ever.

Next year, you can put another £3k in to the same ISA or into a different ISA. What you do with your existing ISA doesn't change that.

Thanks both for your replies.

So if I add a further 3000 next year to existing ISA ( which for arguments sake has become 3200 with tax free interest)

Does all the interest I earn on the combined 6200 remain tax free?

And the same for years 3 and 4 ?

yep

Yes

Yes - provided the rules don't change. ISTR that when ISAs were first invented, there was some talk of reducing the annual amount you could put in them after a few years - but the 3k limit seems to keep getting extended.

Provided the rules don't change, yes.

The main advantage of ISAs is long term roll up of tax free interest. Put in as much as you can as early as you can each tax year and avoid taking cash out unless you have to (e.g. to clear debts). A tough decision can be whether to keep ISAs or dump them into a flexible mortgage. The argument against doing this is that once you close your ISA you lose forever the benefit from previous tax years.

Some banks are getting tetchy now that people have accumulated larger amounts and their headline grabbing interest rates are costing them. It is easy for banks to offer (non-ISA) accounts with 8% pa when the max deposit 50 pds PCM.

Of course you must remember that G Brown can theoretically withdraw ISA tax free status at a stroke. I think it is unlikely but the argument in favour would be that the biggest beneficiarys of ISAs are higher-rate tax payers.

snipped-for-privacy@yahoo.co.uk wrote: > Some banks are getting tetchy now that people have accumulated larger

So are we likely to see the reverse of "lower morgate rate for new mortgages" with ISA providers offering higher rates for newly opened ISAs and existign ISA's shrivelling on the vine?

Robert

snipped-for-privacy@yahoo.co.uk wrote: > Some banks are getting tetchy now that people have accumulated larger

So are we likely to see the reverse of "lower morgate rate for new mortgages" with ISA providers offering higher rates for newly opened ISAs and existign ISA's shrivelling on the vine?

Robert

Anthony