skip to main content
Feb 2020

How Can A Cash ISA Help Me?

How Can A Cash ISA Help Me?

There are a number of situations when holding a cash reserve is prudent. Keeping your cash holdings in an ISA structure gives you flexibility, tax-free interest earnings, and the option to transfer to higher-earning ISA options at a later date. 

There are lots of ways that a Cash ISA can be a very useful financial tool to help you save, even if the interest rates aren’t quite as high as you might like.

We’ve broken down four ways that a Cash ISA can help you.

Cash ISAs can help you…

  1. build good habits
    The world of savings and ISAs can be a bit overwhelming to understand as a beginner on their first foray into finance. Cash ISA is your ISA 101 which can be used as a good foundation for further saving.
    Once you have opened a Cash ISA and learned how ISAs work, you are able to open a different form of ISA and transfer your funds. This means you can get your money in there and be earning interest and gaining experience which can set you up for further lucrative saving.
  2. save while still having access to your cash
    Other forms of ISAs, such as Lifetime ISAs or Stocks and Shares ISAs lock your money away for a fixed amount of time or until a particular life event (like buying a house). This is restricting what you can use your money for. It’s useful if that is what you want your account to do, but if you want access to your Cash while still having that ISA tax-free wrapper, a Flexible Cash ISA is the way to go.
  3. save from day one
    Once you hit the age of 16, you can put your money into a Cash ISA. If you are young and have come into some money, for example through inheritance or you have been saving all your pennies from your weekend job, then putting these funds into an ISA is the best way to maximise your finances for your future.
    You have to be 18 to open any other kind of ISA, so if you are 16/17, a Cash ISA is the way to go. Once you turn 18, you are able to transfer your funds into a Stocks and Shares ISA if you want to capitalise on their more attractive interest rates. This can be a great way to squirrel away some money to support yourself through university, college or the first few years of working life.
    Before you turn 16, your parents are able to put money away for you in a Junior ISA (JISA), but they have to be the ones to open the account. We have a blog on JISAs on our site, which is useful if you want more information.
  4. save as a couple
    It’s not possible to open a joint ISA account. For couples wanting to maximise on each of your tax allowance, you should spread your investment over different types of ISA accounts. 
    You could decide that one spouse should put all of their allowance into a Cash ISA, while the other might put theirs into a Fixed Term ISAa Lifetime ISA or an Investment ISA. 
    This way, you can maximise on the returns you get on your tax allowance through putting some of your joint money into Lifetime or Stocks and Shares ISA which have higher interest rates, whilst maintaining access to some of your money in the Cash ISA.

Read more on different options for Cash ISA accounts. 

Lifetime ISAs

Save for your first home and retirement

Compare Lifetime ISAs

Junior ISAs

Invest for your child’s future

Compare Junior ISAs: 

Stocks & Shares ISAs

Invest tax-free in stocks and shares 

Compare Stocks and Shares ISAs:

Latest News

5 Considerations for Your Next Investment ISA

15th March 2021

You've decided to invest your savings into a Stocks and Shares ISA. You'll be using your tax-free ISA allowance for this year before the deadline, while also investing your money for your future. But what do you need to consider before opening an account? We've put together a list of our top five considerations for you to think about before you click "apply". 

Newsletter Signup

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

About us 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