Does anyone know what happens if I try to transfer funds into my Cash ISA account and exceed the annual limit? Will the transfer bounce? Will the ISA interest be capped at the limit?

Can't find a clear answer anywhere, and apparently, the banks consider this such an exotic scenario that it doesn't deserve a place in their FAQs - which is very surprising, given that the limit is only £20k.


  • 1
    Which country? UK?
    – Aganju
    Jul 2, 2017 at 15:22
  • Yes, UK - sorry should have mentioned that.
    – GrumpyCat
    Jul 2, 2017 at 17:37

1 Answer 1


It depends on the bank(s) involved.

Most likely if you try to put it all in one bank the transfer will simply be returned at the point you make it. If you try to spread it between multiple banks it may take a year or so for HMRC to catch up with you and at that point some of your balance will be moved to a standard bank savings account (probably with a crappy interest rate) and/or returned to you by cheque. The interest earned on the extra balance would be deducted from what was returned to you.

Note also that when you open an ISA, and once a year after that, you have to make a declaration that you won't try to transfer money in above the limit. If HMRC decide that you had knowingly tried to get away with breaking the limit despite signing the declarations, you could also be fined.

  • 1
    After writing this I googled "what happens if you pay too much money into a cash ISA" and I get pages of useful links from people like Mkneh Supermarket, Money Saving Expert, etc which explain this perfectly well. So I'm not sure why you thought you couldn't find out.
    – Vicky
    Jul 2, 2017 at 15:09
  • Thanks for the reply. I saw those useful links, but most of them are very old, and ISAs rules seem to change often.
    – GrumpyCat
    Jul 2, 2017 at 17:38
  • Also, none of the links I read said that the transfer will be returned to the source.
    – GrumpyCat
    Jul 2, 2017 at 17:39
  • 2
    It's worth mentioning that some ISA providers may charge you a significant admin fee for cleaning up the mess you've created. For example Alliance Trust Savings ISA's fees schedule includes: "Repairing or voiding your ISA when required under HMRC rules: £100 plus VAT" ( alliancetrustsavings.co.uk/isa/isa-charges-and-fees ).
    – timday
    Jul 5, 2017 at 10:14

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