What Is An ISA?
What Is An ISA?
With so many offers on the market, it can be difficult to know which ISA to go for. ISAs are Individual Savings Accounts that allow you to accumulate savings and interest that is not subject to tax and will generally pay a higher interest rate than standard savings accounts (although of course, this is not always the case).
There are two types of ISAs, depending on whether you want to save cash or invest:
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Stocks and Shares ISA - Allows you to invest a maximum of £7,200 per tax year
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Cash ISA - Allows you to invest a maximum of £3,600 per tax year
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You are allowed both types of ISA per tax year, as long as you do not exceed the tax free allowance of £7,200 and of that allowance, you do not invest more than £3,600 in cash
When you have withdrawn money from a Cash ISA, that money cannot be replaced once you have deposited £3,600 in that tax year. Withdrawals can be subject to penalties such as loss of interest or a lower rate of interest, depending upon the terms and conditions of the account. Some accounts require that you keep a certain balance in the account to benefit from the high interest rates offered on ISAs
For a selection of ISA accounts, get your FREE ISA Brochures or see the table below:
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Please bear in mind that:
Investment ISAs are designed as medium to long term investments, for example at least five years.
The value of your investment and the level of any income received from it can fall as well as rise and is not guaranteed and you may not get back the amount of your original investment.
The tax efficiency of ISAs is based on current tax law and there is no guarantee that tax rules will stay the same in the future.
If you choose an index-tracking trust which invests overseas, exchange rate variations may cause the value of your investment to increase or decrease.
If you unsure what Investment ISA plan is right for you speak to an independent investment adviser.