ISAs Guidance

(Achchuthan) #1

I am a little bit confused about ISAs and how they work. I currently have ISA savings account with HSBC where I’ve put in the max amount of £20K that’s allowed in a year. Over the year the interest has accrued on it and I have two questions regarding this

  1. If due to the interest on the savings it has become, let’s say £20,100 - Does this mean the government now considers me as going over the limit and will tax me on the interest I’ve gained? i.e on the £100 for example

  2. Also, I understand that each year there is an ISA allowance limit. Does this mean I can keep the £20K allowance from the 18/19 in the existing ISA account, then let’s say for the 19/20 year when Monzo introduces cash ISAs I can start putting money into that? or do ISAs work in a way wherein one given year you can only have £20K tax free savings?

(Splodf) #2

No deposits only interest doesn’t count towards your totals

Every year you can invest 20k into an ISA.

If you invest 20K in an ISA, the following year you can invest another 20K into an ISA (Taking the total to £40k - and so on each tax year.) This is irrelevant of supplier it only counts as ISA type.

So you can open one Cash ISA/ S&S ISA and a IFISA in the same year. The total amount invested into all of these cannot exceed £20,000 in total.

(Achchuthan) #3

This helps a lot thank you so much! First time using the monzo community and it’s already proving to be so valuable and insightful :slight_smile: