Help me to understand ISAs please

[Lia73]

Hi. I have an isa with a very low rate that I haven't really touched in years. It has 8k in it. I was wondering if I could move this to a higher paying ISA with my own bank and top it up to 20k. Will I then get interest on the full amount come April? If I then invest another 20k next year, do I get tax free interest on the full 40k? Not sure where to put my savings now I finally have some! I've tried looking up the info myself but I can't really find the answer. Any information would be really welcomed.

I would put 5 k into best isa rate you can find and put the rest in stocks and shares isa, index funds... Low cost and buy them over a period of time eg a few 100 a month.

Try www.moneysavingexpert.com . It explains ISAs and tells you the best rates in real time.

Thank you. I have looked there but still a little confused! It has led me to put my money into a high interest savings account though, which is better than it sitting where it was making nothing. I'll have another look on MSE.

OK.. hadn't thought of that to be honest. Will look into it. Thanks.

You can transfer the existing cash isa with £8k to a better paying one but do it through the bank system (there is usually a form online) or it loses its tax free status.

If it was opened in this current tax year then yes you can top it up to £20k if the new bank allows it. If it was opened a long time ago as your post indicates you can put a further £20k in now as there is a limit of £20k per tax year.

You can look on MSE for best paying cash isas. You may find that a fixed term one will pay the highest interest rate.

Just saw this reply
Thank you. That's helpful.