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Feb 2020

How Do I Open a Cash ISA?

How Do I Open a Cash ISA?

Opening a Cash ISA is a great way for keen savers to put their cash into a savings account which offers returns on interest rates which are safe from the taxman. But how do you open a Cash ISA? 

If you’re a regular saver earning interest on your savings, you might be considering a Cash ISA to ensure that your saving returns over £1000 are protected from being taxed. A Cash ISA is a great way to earn tax-free interest while, in some cases, having access to your money.

Can I open a Cash ISA?

All adult UK Citizens are entitled to open one tax-free Cash ISA per tax year. Tax years run from April 6th-April 5th and your allowance doesn't carry over into the next year if not used - so use it, or lose it!

You can also open a Cash ISA if you are 16 years old. 

You’ll need to have your National Insurance number to hand in order to open one, and you’ll need to know the answers to the following questions:

1.Have you opened a Cash ISA already this tax year?

If the answer is yes, then you cannot open another Cash ISA until the next tax year. You are only allowed to open one Cash ISA each tax tear.

2.How much of your tax ISA allowance have you already used this year?

If you are a very keen saver and have already squirrelled away enough funds to use the whole of your £20,000 allowance then you cannot open a Cash ISA.

You’ll need to wait until the start of the next tax year on April 6th to open a new Cash ISA, as this will use your next years’ allowance.

Can I open a Cash ISA online?

Yes! But this depends on your provider. 

Many providers have ISA accounts which can be opened online. Have a look through our Cash ISA directory and look at the providers there to see if you can find one to suit you.

Some providers also will let you open a Cash ISA over the phone - so there is by no means a requirement to go down to a bricks and mortar bank. 

What type of Cash ISA should I open?

This really depends on what you want from your Cash ISA. 

  1. If you know that you will need access to your cash soon, then an Instant Access Cash ISA is the way to go – although bear in mind that interest rates on these accounts do tend to be quite low.
  2. If you’re happy locking your money away for a longer term, then a Fixed Term ISA is the account for you. Providers offer deals including different term lengths (e.g. 1,2,3, and 5 year terms) which gather interest, and then you can access your cash at the end of the term.

Have a browse through our Cash ISA page to see which accounts might suit you. 

Can I transfer my money to a newly opened Cash ISA? 

The short answer is yes, but we've written a blog which breaks this down in detail, giving you all you need to know about transferring your ISAs. 

Read more about Cash ISAs. 

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