skip to main content
Homepage /

Comprehensive Guide to ISAs

Encouraging UK taxpayers to save
ISAs (Individual Savings Accounts) were introduced in 1999 as a means of encouraging UK taxpayers to save. They replaced PEPs (Personal Equity Plans) and TESSAs (Tax Exempt Special Savings Accounts).
Investment Fund Supermarket ISAs

Astute Capital Stocks & Shares ISA

from Astute Capital

Allows ISA Transfers
  • Protection Scheme: No
  • Fund Choice: Managed Portfolios
  • Invest From: £2,500

Why we like it: Astute Capital Stocks & Shares ISA. Choose between four different high interest managed account options (access, income, balance or growth) which have four different fixed rate terms from 1 to 5 years. Unlike most ISA and investment accounts, there are no set up charges or management fees. Simple, online application process. Returns are based on current available rates and are not guaranteed. Your capital is at risk.More info...

Click & Invest Stocks & Shares ISA

from Investec Click & Invest

Allows ISA Transfers
  • Protection Scheme: FSCS
  • Fund Choice: Managed Portfolios
  • Invest From: £2,500

Why we like it: In a nutshell this service helps make your ISA money work harder! Investec Click & Investis an online investment service that aims to make actively managed, globally diversified investment portfolios accessible to a wider audience. Everyone deserves harder working money, and Click & Invest’s goal is to make a positive difference to more financial futures. Their experts build and manage investment portfolios from £2,500 online, intelligently blending expertise with high-quality service. With a £2,500 minimum investment, Click & Invest aims to deliver an exceptional service for a straightforward fee. They offer both stocks and shares ISAs and general investment accounts, with a seamless online experience, with dedicated 24/7 support available. Capital at risk.More info...

Investment Fund ISA

from AJ Bell

Allows ISA Transfers
  • Protection Scheme: FSCS
  • Fund Choice: 2000+ Funds
  • Invest From: £25 pm

Why we like it: It is simple to invest in a fund online. You will need to open an account first and then choose the fund you are interested in investing in. There are over 2,000 funds to choose from but to make it easier for you AJ Bell have created their favourite funds list which is their pick of the best funds. Capital at risk

Investment Growth Plan ISAs

FTSE 100 Enhanced Kick Out Plan

from Investec

Allow ISA Transfers
Maximum Potential Return 10.25% per annum
  • Counterparty: Investec Bank plc
  • Term: Up to 6 years

Kick out plans seem to attract particular interest when the market is at historically high levels since they can provide competitive returns even if the FTSE stays relatively flat with the potential for 10.25% annual growth.

  • 10.25% for each year (not compounded) provided the FTSE 100 finishes higher than its starting value (subject to averaging)
  • Potential to mature early, from year 1 onwards
  • Available for ISA, ISA transfer and direct investment
  • Capital is at risk if the FTSE 100 Index has fallen by more than 40% at maturity from it's initial level, in which case your initial investment will reduce by 1% for each 1% fall
  • Minimum investment £3,000
  • Product designed to be held for the full term

Important Information: Structured investment plans are not capital protected and are not covered by the Financial Services Compensation Scheme (FSCS) for default alone. There is a risk of losing some or all of your initial investment due to the performance of the underlying investment. There is also a risk that the company backing the plan known as the Counterparty may be unable to repay your initial investment and any returns stated.

Investment Income Plan ISAs

FTSE 100 Defensive Income Plan

from Investec

Allow ISA Transfers
Annual Income up to 7.20%
  • Counterparty: Investec Bank
  • Term: Maximum 8 years

If you’re looking for high income, then the ability to receive 7.20% per year even if the FTSE falls almost 20%, could be appealing.

  • Up to 7.20% per year based on the performance of the FTSE 100 Index
  • Income paid even if Index falls by 20%
  • Quarterly payments
  • Alternative option also available paying up to 5.40% pa if the FTSE doesn't drop by 40% or more
  • Capital is at risk if the FTSE 100 Index has fallen by more than 40% at maturity from it's initial level, in which case your initial investment will reduce by 1% for each 1% fall
  • Minimum investment £3,000
  • An arrangement fee applies for this plan
  • Product designed to be held for the full term

Calculate your interest with this plan

Your savings:
£
You could gain:
£0.00 (per tax year)

Important Information: Structured investment plans are not capital protected and are not covered by the Financial Services Compensation Scheme (FSCS) for default alone. There is a risk of losing some or all of your initial investment due to the performance of the underlying investment. There is also a risk that the company backing the plan known as the Counterparty may be unable to repay your initial investment and any returns stated.

Deposit Cash ISAs

ISA Deposit Plan

from IDAD

ISA Option
Maximum Potential Return 8.00% pa or 2.5 x FTSE growth
  • Deposit Taker: Goldman Sachs International Bank
  • Term: Up to 7 years

Why we like it: The previous issue of this plan had already proved popular - this latest release offers the potential for 8.0% p.a. interest, along with the same capital protection you would get with a traditional cash deposit.”

  • Plan can be ended early by Deposit Taker
  • 2% per quarter (8% pa) if plan ends early
  • 2.5 x FTSE 100 Index growth if plan runs full term
  • Capital protected product*
  • Eligible for the Financial Services Compensation Scheme (FSCS)
  • If plan runs full term returns not guaranteed. You may only receive a return of your original capital
  • Minimum investment £10,000
  • If you withdraw your money during the plan you may get back less than you originally invested

Calculate your interest with this plan

Your savings:
£
You could gain:
£0.00 (per tax year)

Important Information: * The return of your initial deposit depends on the ability of the deposit taker (Investec Bank plc) to repay your money. 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.

FTSE 100 6 Year Deposit Plan

from Investec

ISA Option
Maximum Potential Return 42.00% at end of term
  • Deposit Taker: Investec Bank plc
  • Term: 6 years

"This plan offers a potential fixed return of 42%, provided the FTSE 100 Index at the end of the term is higher than its value at the start of the plan (subject to averaging). As with other cash deposits, your capital is also eligible for FSCS* protection.

The 42% return is equivalent to 6.38% compound growth each year, which is well over double the best fixed rate bond, and more than 4% per year higher than the top fixed rate Cash ISA.

The downside is that the return is not guaranteed, and so if the FTSE ends lower, you only get your initial capital back.”

  • 42% fixed return if the Index is higher
  • Capital protected product*
  • Eligible for the Financial Services Compensation Scheme (FSCS)
  • Returns not guaranteed. You may only receive a return of your original capital
  • Minimum deposit £3,000
  • Plan designed to be held for full term

Calculate your interest with this plan

Your savings:
£
You could gain:
£0.00 (per tax year)

Important Information: * The return of your initial deposit depends on the ability of the deposit taker (Investec Bank plc) to repay your money. 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.

FTSE 100 Income Deposit Plan

from Investec

ISA Option
Maximum Potential Return 3.25% annual income
  • Deposit Taker: Investec Bank plc
  • Term: 6 years
  • Potential 3.25% per year based on the performance of the FTSE 100 Index
  • Income paid even if Index falls by 25%
  • Alternative monthly option also available paying up to 3.12% pa
  • Capital protected product*
  • Eligible for the Financial Services Compensation Scheme (FSCS)
  • Returns not guaranteed. You may only receive a return of your original capital
  • Minimum deposit £3,000
  • Plan designed to be held for full term

Calculate your interest with this plan

Your savings:
£
You could gain:
£0.00 (per tax year)

Important Information: * The return of your initial deposit depends on the ability of the deposit taker (Investec Bank plc) to repay your money. 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.

Fixed Rate Cash ISAs

1 Year Fixed Rate Cash ISA

from Aldermore

Interest Rate (AER) 1.55%
  • Term: 1 Year

Open a 1 Year Fixed Rate Cash ISA with Aldermore Bank to get a great return. 

2 Year Fixed Rate Cash ISA

from Aldermore

Interest Rate (AER) 1.75%
  • Term: 2 Year

'Winner' – ISA Provider of the Year for the 5th year running Consumer Moneyfacts Awards 2011-15

3 Year Fixed Rate Cash ISA

from Aldermore

Interest Rate (AER) 1.85%
  • Term: 3 Years

'Winner' – ISA Provider of the Year for the 5th year running Consumer Moneyfacts Awards 2011-15

  • £1,000 minimum opening balance

Calculate your interest with this plan

Your savings:
£
You could gain:
£0.00 (per tax year)

Comprehensive Guide to ISAs

There are two types of ISA. Cash ISAs allow you to save without the interest being subject to tax. The second type of ISA is a stocks and shares ISA, also known as an investment ISA.

How much can I put into an ISA?

From 6th April each year, every eligible person gets an ISA allowance.

You can only have one ISA in each financial year, so research your options carefully. Whether you choose a cash or investment ISA, give some thought to your savings goals beforehand to determine what the right ISA is for you.

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, think about maximising your ISA allowance. The cash ISA allowance for the financial year 2018/19 is £20,000.

An ISA is a great way to save for a specific event like a deposit for buying a home, a wedding, holiday, or starting a family

What can an ISA do for you?

An ISA can help you to build up an emergency fund - the money in a cash ISA can be withdrawn at any time, provided that the ISA manager you choose offers these terms. This lets you stash money away for a rainy day without paying tax on any interest you earn.

Stocks and shares ISAs are an easy way to invest in the stock market without having to pay capital gains tax on your earnings.

An ISA can help you save for the cost of higher education for yourself or your children - you can put money away to help your children with university expenses, which are increasing year on year and look set to continue in this vein. Or perhaps you're looking to go back into education yourself? 

While it usually makes financial sense to take advantage of a student loan rather than paying tuition fees upfront, it's very useful to have some money saved up for non-tuition expenses such as textbooks, rent and food. In addition to the peace of mind that comes with having funds to help with education, you can also enjoy the tax benefits that come with saving money in an ISA.

An ISA can be a good way to build up a nest egg for retirement - many investors are moving away from traditional pensions and investing more money in ISAs. But why? Firstly, ISAs offer more flexibility than pensions, allowing you to customise your savings to your specific needs. Secondly, the money in an ISA can be withdrawn prior to retirement age, without penalty, if it becomes necessary.

What Cash ISA Should I Choose?

Choosing between a fixed rate ISA and an Instant Access ISA can be tough.

An instant access cash ISA might be the right choice for you if:
  • You would like a good rate of interest, plus the ability to get hold of your money quickly if necessary
  • You need to take advantage of your annual tax-free savings allowance but only have a small amount to deposit - instant access ISAs can usually be opened from as little as £1
  • You want to be paid regular interest as 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
  • You can use our services and tables to help you choose the right option for you

What Stocks and Shares ISA should I Choose?

Picking the best Stocks and Shares ISA can be daunting, there are plenty to choose from so it can be a little daunting. Particularly for people who are new to investing.

Providers are constantly making it easier for people new to investing or people who are too busy to manage their funds.

A Stocks and Shares ISA is a tax-efficient way to invest. Despite the name, you can invest in many things besides Stocks and Shares, all with varying levels of risk.

As well as shares you can also invest in:

  • Investment trusts
  • Open Ended Investment Companies (OEICs)
  • Unit trusts
  • Government bonds (Gilts)
  • Corporate bonds
  • Some providers have a large portfolio of funds to choose from whereas others have a more streamlined approach to make it easier to manage.

    Check for account management fees and transactions charges.

    What is a Junior Cash ISA?

    Junior Cash ISAs offer each eligible child a tax-free savings account. They are a way for parents, family or friends can contribute funds to help save for the child's future. Junior ISAs first become available in November 2011 to replace the now-defunct Child Trust Fund

    There are several advantages to choosing a Junior Cash ISA for your child. We’ve listed some below:
    • It's an easy and convenient way to save tax-free for your child's future - Unlike many savings accounts, the money saved in a junior cash ISA stays tax-free once the child reaches adulthood. If the child decides to keep the cash in the account once they reach 18, it will automatically be converted to a regular ISA.
    • Any adult can pay money into the account - family friends, grandparents, godparents, aunts and uncles can all contribute - making a junior cash ISA an ideal way to save up money given on birthdays and other special occasions without the child being tempted to spend it.
    • The money is locked away until the child turns 18 and cannot be released by either parents or children until this point - a bit like a pension fund. This can be advantageous as it means the child can't blow all their savings on clothes or holidays once they hit the teenage years - and parents won't be tempted to dip in either.

    Conclusion

    Learning about ISAs before you open your first account will not only ensure that you're complying with all tax regulations, it will also enable you to reap the maximum benefit from your ISA savings or investments.

    There are many ways to use your ISA allowance, whether you invest for the short term or over the long term. With so many options for your money, it's no wonder this savings vehicle is so widely recommended by financial experts today. As always, it's best to seek independent financial advice before taking out any savings or investment product.

    Important Risk Information:

    This website contains information only and does not constitute advice or a personal recommendation in any way whatsoever. The value of investments and income from them can fall as well as rise and you may not get back the full amount invested. 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.

    Different types of investment carry different levels of risk and may not be suitable for all investors. Please ensure that you read the Important Risk Information for further details. Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular investment and should read the product literature. If you are in any doubt as to the suitability of a particular investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.

    High Income ISAs

    High income ISA ideas:

    ISAs Products

    Cash ISAs

    Fixed Rate & Instant Access ISAs:

    Cash ISAs: 

    Stocks & Shares ISAs

    Types of Stocks and Shares ISA include: 

    Stocks and Shares ISAs

    Latest News

    Lower ISA fees for fitness enthusiasts

    13th March 2019

    Do you need a nudge to encourage you to keep going to the gym, or for a regular run? How about lower admin fees on your ISA? Your health is as important to how much you will enjoy your retirement years as your future income. A new ISA provider reckons it makes sense to link the two together.

    Newsletter Signup

    Sign up to our Newsletter to get exclusive news and offers direct to your inbox.

    About us

    ISA.co.uk is a trading style of Fair Investment Company.

    We've been comparing and recommending ISAs for many years so you can trust you're in good hands.

    About us