ISA's
Individual Saving Accounts or ISAs are a way of saving money tax free. Launched in 1999 they replace PEPs and TESSAs. There are two types of ISAs and under government rules in any one tax year (April - April) you are only allowed to open one ISA.
Mini ISA - you can open three accounts with three separate investment providers;
- Up to £3000 in a cash account
- Up to £3000 in stocks and shares
- Up to £1000 in life insurance
Maxi ISA - all your ISA allowance is invested in a single package with a single provider - this is normally a stocks and shares account, although depending on which company you invest with it may include cash and life insurance investments.
If this wasn’t confusing enough there are a number of different cash ISAs for you to choose from:
- Easy access accounts - low minimum investment and immediate access to funds.
- Notice accounts - typically you will need to give 30, 60 or 90 days notice to withdraw money.
- Bond or Term accounts - involve a longer commitment. Your investments will usually be tied for an agreed time period.
- Regular savers account - for people intending to make regular deposits. These usually involve a minimum investment each month and restrictions on the number of withdrawals you can make.
ISAs were introduced by the government to try and encourage more saving, and at the same time some voluntary standards were set. So if you are unsure about which account to take out and with which provider it maybe worth looking out for accounts which meet these standards: