Q1. On the amount you`ve withdrawn but a high rate better leaving it if you can.

Q2. Answer is Yes.

If you take the money out of an ISA and reinvest it, then you will indeed lose some of the benefits of ISAs. If you take it out and spend it, it dosen't really make much difference but if you are wanting the money to stay invested at the end of a bond's term you should transfer the ISA to another provider (it will then count as being the same, old, ISA) rather than taking the money out and starting again. When you have chosen the provider, you should contact them and ask them to arrange the transfer.

I have traveled a lot with my job for a few years, and I have been opening ISA's to take advantage of the tax free status, but I do not fully understand them. I have two questions.

Question 1: I read somewhere that if you withdraw funds you lose the tax free status, is this on the amount you have withdrawn or the whole ISA?

Question 2: If we have fixed rate ISA's, can we withdraw the interest on the accounts maturity without penalty, and then reinvest the principal in a new ISA.