A Guide to ISAs
An Individual Savings Account (ISA) is a flexible, tax-efficient way to save or invest.
There are two types of ISA:
- Cash ISA: Deposit based savings account
- Stocks & Shares ISA: Invest directly in stocks and shares
You can choose to save in a Cash ISA or invest in a Stocks & Shares ISA, or a combination of both.
Your ISA allowance
Each tax year, you have an allowance that you can use for your ISA. For this current tax year (6 April 2012 - 5 April 2013) your maximum is £11,280, of which you can save up to £5,640 as a Cash ISA, with the remainder in a Stocks & Shares ISA, or you can invest your entire allowance of £11,280 in a Stocks & Shares ISA.
Why have an ISA?
- You won't pay tax: The interest on your Cash ISA isn't taxed, and currently all gains in Stocks & Shares ISA investments are free of personal income and capital gains taxes. You don't even need to declare your ISA investments to the tax man.
- Access to your money: Cash ISAs allow you to withdraw your money, some without any loss of interest, so you can get to it if you really need to. Stocks & Shares ISAs will invest in assets that can go up and down in value, so they are not suitable for investing in for short periods. If you withdraw some or all of your ISA investment, you will not be able to replace the amounts withdrawn within the same tax year, unless the amount you wish to invest is within your unused ISA allowance.
- Long term tax benefits: If you open an ISA at the beginning of the tax year, you'll be able to maximise your tax benefit by gaining the full 12 months potential return tax free. You won't have to pay tax for subsequent years either, as long as your money remains within an ISA.
Find out more about topping up an existing ISA or transferring an existing ISA to us.
Choose from our range of cash ISAs
View rates
Or find out about the funds available in the Stocks & Shares ISA
Who can have an ISA?
To have an ISA you need to be:
- A UK resident (Crown employees working overseas and spouses/civil partners are still eligible)
- 16 or over for Cash ISAs
- 18 or over for Stocks & Shares ISA
- An individual (companies, clubs, societies and so on are not eligible)
Please note you can only invest with one Cash ISA provider in each tax year and the same, or another Stocks & Shares provider.
*Tax treatment is dependent on individual circumstances. The tax information provided is based on our current understanding or current law and HM Revenue & Customs practice which can change.