A flexible ISA is a modification of an ISA. An ISA is an account that does not have tax on the interest gained. The flexible ISA policy was initiated and applied to all credit institutions as of 6th of April, 2016. The policy allows for the application of various flexible features to a normal ISA account. The features can be applied to an ISA account regardless of whether it was opened post the 6th of April or even before that. The policy offers various advantages to individuals especially as concerns cash withdrawals. The flexible ISA allows for an individual to withdraw money without any limit from the account. The money can be deposited at irregular intervals without any limit on the deposit.
The flexible ISA feature is applicable to all ISA accounts regardless of when they were opened. However, not all the credit institutions that offer ISA have the flexible ISA feature. The money deposited to replace that which was withdrawn will not add up to or contribute to that of the annual subscription. The only instance where that is possible is when the money deposited for the repayments exceeds that which was withdrawn, within the same tax year.
There are certain rules or limitations to the flexible ISA including:
- The money that is withdrawn from the account, though without a limit on withdrawal has to be repaid within the same tax year as that which it was withdrawn.
- A flexible ISA account is not transferrable from one credit institution to another. For that reason, if the money that was withdrawn on a certain account is not repaid before opening another account, the money cannot be repaid into the new account. In the event of a transfer, the new credit institution is not informed about the funds to be paid. Instead, the information passed on concerns the value of money that is left within the account, and that which is accessible for withdrawal.
- The flexible ISA feature only works for withdrawals and not deposits.
- 1.A flexible ISA allows for an individual to use the money that they have saved instead of their allowance on the account.
- 2.The unlimited withdrawal is very beneficial to individuals especially concerning situations of emergency.
- 3.By using flexible ISA, an individual retains his/her tax benefits and is still able to use their savings.
The flexible ISA is only accessible to credit institutions that have agreed on it. You should therefore confirm whether or not it is offered by your bank.