ISA Ideas

• Cash ISAs
• Fixed Rate Cash ISAs
• Instant Access Cash ISAs
• Structured Cash ISAs
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• ISAs Explained
• 5 Factors to Consider when choosing a Cash ISA
• What can Cash ISAs include?

Cash ISAs

Latest Cash ISA rates

The 2013/14 Cash ISA allowance is £5,760.

 

Use our cash ISA tables below to compare a selection of market-leading cash ISAs for instant access, fixed rates and alternative ideas to maximise your tax free returns.

 

James Caldwell, Director

Cash ISA Selection

Provider	Plan Name	Deposit Taker	ISA Option	Term	Maximum Potential Return	More Info
	Deposit Growth Plan	Investec Bank plc		5 years	130% x any FTSE 100 growth (no limit)	More Info >
Return of 130% x any FTSE 100 growth, no upper limit Capital protected Low minimum - £3,000  Short/medium term alternative to fixed rates  Also available for Cash ISA & Cash ISA transfers Limited offer - deadlines apply. May close early if oversubscribed Plan designed to be held for full term Arrangement fee applies Returns not guaranteed. You may only receive a return of your original capital

Important Information: Structured deposits offer you the potential to earn higher returns than you would with a regular savings account. Your returns are based on the performance of an index or commodity. If the investment does not perform well you may receive no income or capital growth, but you can be confident that your capital will be repaid. You have no access to your deposit during the term of the account, typically 3 to 6 years but your original capital will be repaid in full at the end of the term. In the event that the deposit taker is unable to repay your initial investment and any returns stated you may be entitled to compensation from the Financial Services Compensation Scheme (FSCS) depending on your individual circumstances.

Instant Access Cash ISA Selection

Fund Manager	Account	Rate	Term	More Info
	E-Cash ISA	1.30%	Instant Access	More Info >
No bonus included in the rate No notice period or loss of interest for withdrawals Transfers accepted Minimum balance £10 Access – online, telephone and post Annual interest Variable interest rate

Fixed Rate Cash ISA Selection

Fund Manager	Account	Rate	Term	More Info
	2 Year Fixed Rate Cash ISA	1.85%	2 Years	More Info >
Earn 1.85% AER tax free. Minimum deposit £1,000 Interest will be paid at the rate of 1.50% AER/Gross (fixed) p.a. until the Fixed Rate ISA start date - 29th July 2013 Partial withdrawals are not permitted during the fixed term Early closure will result in an interest charge
	1 Year Fixed Rate Cash ISA	1.85%	1 Year	More Info >
Minimum opening balance of £1,000 Manage your account online Withdraw cash early if you need to (subject to loss of interest) Transfer from other cash ISA providers
	1 Year Fixed Rate Cash ISA	1.70%	1 Year	More Info >
Earn 1.70%AER tax free. Minimum deposit £1,000 Interest will be paid at the rate of 1.50% AER/Gross (fixed) p.a. until the Fixed Rate ISA start date - 29th July 2013 Partial withdrawals are not permitted during the fixed term Early closure will result in an interest charge

What is a cash ISA?

A cash Individual Savings Account (ISA) is a tax-free savings account which allows you to save up to a set amount of money per financial year without paying any tax on it. The cash ISA limit currently stands at £5,760 per person and you need to be a UK resident or Crown employee aged 16 or over to open an account. You can only have one cash ISA per tax year, but you can also have a different type of ISA, known as a stocks and shares ISA, simultaneously.

Benefits of a cash ISA

There are three key benefits to a cash ISA:

• No income tax - you don't pay tax on any interest you earn from the cash in your ISA.
• Easy access - if you choose an instant access cash ISA (rather than a fixed-rate cash ISA) it's a convenient way to save at a good interest rate while retaining fast and easy access to your money, should you need it.
• Easy transfers - if you find an ISA provider that offers a better deal than your current provider, you can transfer your cash ISA to them.

How much tax can I save with a cash ISA?

The good news is that whatever your tax bracket, you'll pay 0% tax on any savings held in a cash ISA. Compare this to the usual tax rates on savings:

If you're a basic rate taxpayer...
you would usually pay 20% tax on interest earned from savings.

If you're a higher rate taxpayer...
you would usually pay 40% tax on interest earned from savings.

If you pay tax at the additional higher rate...
you would usually pay 50% tax on interest earned from savings.

If you pay the 'savings rate' of tax for savings...
you would usually pay 10% tax on interest earned from savings.

Using your cash ISA allowance can therefore save you money by allowing you to keep 100% of any interest you earn.

The above information gives you a general idea of what you could save - remember that it depends on your individual circumstances and may be subject to change in the future.

Can I transfer a cash ISA?

It depends on your circumstances. If you've got some money saved as a lump sum from a previous tax year, you'll usually be permitted to transfer this from one cash ISA to another, or to a stocks and shares ISA. This transfer shouldn't affect your ISA investment allowance for the current tax year. However, bear in mind that once you've transferred a cash ISA into a stocks and shares ISA, you don't have the option to transfer it back into a cash ISA. See our section on cash ISA transfers to find out more.

Which type of cash ISA is right for me?

An instant access cash ISA might be the right choice for you if...

• You want a good rate of interest, plus the ability to get hold of your money quickly if necessary.
• You want to take advantage of your annual tax-free savings allowance but only have a small amount to deposit - instant access ISAs can be opened from as little as £1.
• You want to be paid regular interest - instant access ISAs usually offer monthly or quarterly interest.

A fixed-rate cash ISA might be right for you if...

• You are happy to put your money aside for a set period of time - this usually allows you to accrue a higher rate of interest than you might get with an instant access cash ISA.
• You want to take advantage of your tax-free savings allowance and have a lump sum to deposit - many fixed-rate cash ISAs require an initial deposit of around £1000.

Use our services to help you choose

Like any investment option or financial service, it's important to research your options before committing to a cash ISA. You might find our services useful for:

Comparing cash ISAs, including instant access ISAs and fixed-rate ISAs

Comparing cash ISAs with other savings options

Top tips for making the most of your cash ISA in 2013

• You can only have one type of cash ISA in each financial year, so research your options carefully. Whether you choose a fixed-rate or instant access cash ISA, give some thought to your savings goals beforehand to help you determine what's right for you.
• Remember that you can't carry your tax-free allowance over from one financial year to the next - so if you've got enough cash to hit your limit, stash it in an ISA. The cash ISA allowance for the financial year 2013/14 is £5,760 and the deadline is 5^th April 2014.
• Because a cash ISA operates on a year-long basis, it's a good way to try your hand at saving without committing yourself to anything long-term. It's also a great way to save for a specific event like a wedding, holiday, or starting a family.
• Once you've set up your cash ISA, make sure you still keep an eye on the interest rates available from other providers. You can usually switch cash ISA providers without incurring any charge.
• To make life easier, set up a direct transfer from your current account into your cash ISA to make sure that you put aside a certain amount each month without fail.
• Don't forget that you've got the option of opening a stocks and shares ISA, too. For more on this, see our page on stocks and shares ISAs.