Nutmeg Cash ISA Rates Calculator

Compound Interest Formula:

\[ A = P \times (1 + r/n)^{n \times t} \]

Principal Amount (P):

Annual Interest Rate (r):

Compounding Frequency (n):

Time (t):

years

Future Value (A):

Interest Earned:

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1. What is the Nutmeg Cash ISA?

The Nutmeg Cash ISA is a tax-free savings account that allows UK residents to earn interest on their savings without paying tax on the interest earned. It's part of the Individual Savings Account (ISA) allowance provided by the UK government.

2. How Does the Calculator Work?

The calculator uses the compound interest formula:

\[ A = P \times (1 + r/n)^{n \times t} \]

Where:

\( A \) — Future value of investment (£)
\( P \) — Principal investment amount (£)
\( r \) — Annual interest rate (decimal)
\( n \) — Compounding frequency per year
\( t \) — Time in years

Explanation: The formula calculates how your investment grows over time with compound interest, where interest is earned on both the principal and accumulated interest.

3. Importance of Compound Interest

Details: Compound interest is a powerful concept in investing where your money grows exponentially over time. The more frequently interest compounds, the faster your investment grows. This makes it crucial for long-term savings goals like retirement planning.

4. Using the Calculator

Tips: Enter your initial investment amount in pounds, the annual interest rate as a percentage, select how often interest compounds, and the time period in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the current ISA allowance?
A: The annual ISA allowance for the 2024/2025 tax year is £20,000. This may change in future tax years.

Q2: Are Nutmeg Cash ISA rates fixed or variable?
A: Interest rates on cash ISAs can be either fixed or variable. Check Nutmeg's current offerings for specific rate information.

Q3: Can I withdraw money from my Cash ISA?
A: Yes, most Cash ISAs allow withdrawals, but terms vary. Some may have notice periods or withdrawal restrictions.

Q4: Is my money safe in a Nutmeg Cash ISA?
A: Nutmeg is regulated by the FCA and eligible deposits are protected up to £85,000 by the FSCS (Financial Services Compensation Scheme).

Q5: Can I have multiple ISAs?
A: You can have multiple ISAs but you can only pay into one Cash ISA and one Stocks and Shares ISA in each tax year.