Does Interest on Cash ISA count towards ISA allowance?

I opened an Cash ISA account with 20000 pounds, which is the yearly limit. At the end of the first month, I've earned ~20 pounds interest, and it's been paid into the same ISA account. Have I now exceeded my ISA limit because I have 20020 pounds in the account?

Hi,

No, as interest does not count as paying funds in.

Thank you.

Hi I opened a 1-year fixed term cash ISA account in the tax year 2023-2024. I was told I was to receive monthly interest by cheque since I did not have any personal account in that said bank. I understand any interest generated from an ISA account is tax-free. But in my case, I wonder how the tax-free is guaranteed if I deposit cheques to another bank (non-ISA account)? Does it mean I do NOT need to report my earned interest from the ISA account to HMRC? And theoretically, if the interest earned from the ISA account can be deposited into the same account (e.g. 100pounds interest earned) in 2023-2024 tax year and I get 20,100 pounds when the account matures, does it mean I can have a capital of 20100 + 20000 = 40100 pounds in a new ISA account opened in the next tax year? Thank you in advance for any reply

Hi,

The interest from the ISA is normally paid straight back into the same account. As it's a cheque going to another account, it would just show as a deposit being made by you and no reference to it being an interest payment. You would therefore only declare any interest that is then generated from the deposits made to the non ISA account.

Thank you.

I understand that interest paid from an ISA does not count as paying funds in. Does that mean that if I, say, have a 3 Year Fixed Rate ISA that pays interest monthly then, rather than paying the interest into my bank account, could I ask for it to be paid into an existing easy access ISA account? IE So I have access to the interest from the Fixed ISA yet the interest on that remains tax free?

Hi
This is something you would need to discuss with your ISA provider.