Compare M&S ISAs

Who are M&S Bank?

M&S Bank was launched by Marks and Spencer in 1985 and operates as a retail bank trading in the UK.

The bank is fully authorised and regulated by the FCA, and they specialise in providing personal savings and banking products for individual customers.

The financial services products M&S offer include loans, credit cards, insurance products, current accounts and savings accounts.

One of the savings accounts they provide is a Cash ISA account, with variable and fixed interest rates available.

What is an ISA account?

An ISA account is a type of savings account with added tax benefits.

In a standard savings account, you need to pay income tax on dividends and interest, and capital gains tax on the growth of your investments.

But in an ISA, your investments are always 100% free from tax.

This makes them an attractive savings option for investors, as you get the peace of mind that you’ll never need to declare your ISA savings to the taxman.

The government allows you to invest up to £20,000 in the current tax year into ISAs. Your ISA allowance refreshes each tax year, but this is the current maximum you can contribute.

There are two main types of ISA accounts:

1. Cash ISAs
2. Stocks and Shares ISAs

Cash ISAs offer fixed or variable interest rates based on the fixed term of your investment and the flexibility for withdrawals. You always get back at least what you put in provided you don’t withdraw before your term ends, but interest rates are fairly low in the UK currently, and have been since 2008.

Stocks and Shares ISAs allow you to invest your ISA funds in the stock market, either via a ready-made managed portfolio or through your own investment choices. The potential for growth and dividends is much greater, but your investments can both fall as well as rise in value.

What type of ISAs do M&S Bank offer?

The M&S Bank ISA is a Cash ISA, and they offer variable-rate and fixed-rate options.

Fixed-rate Cash ISA:

1. Gives you a guaranteed rate of interest over a fixed term, from 1 to 5 years
2. The longer the term, the higher the interest rates
3. You are charged if you withdraw before the end of your term

Variable-rate Cash ISA:

1. Gives you a lower rate of interest that can fluctuate over time
2. You get lower interest rates than fixed-rate ISAs, but you can withdraw without penalty

M&S Bank allow you to mix and match between each of their Cash ISA rates.

For example, you could invest £17,000 into the 3-year fixed-rate ISA and £3,000 into the variable rate ISA so that you have convenient access to £3,000 if you need it while benefiting from higher rates on the fixed portion.

What are the rules and restrictions for ISAs?

HMRC enforce several restrictions to ISA accounts and how you can use them, so it’s important to know the fundamental rules before investing:

• The maximum amount you can contribute to an ISA this year is £20,000
• Your ISA allowance is split between both Cash ISAs and Stocks and Shares ISAs, so you can share your contributions between the two types
• You can't add money to more than one Cash ISA in the same tax year
• The same goes for Stocks and Shares ISAs – you can’t open two in the same tax year
• But you can open different Cash ISAs across multiple tax years provided you don’t add to both in the same year
• You can transfer existing ISAs to a new ISA and it will not be classed as a contribution towards your annual ISA allowance
• Your ISA allowance doesn’t carry forward to the next tax year - you lose any allowance that you don’t use
• Your allowance refreshes each tax year on 6th April
• If you withdraw from an ISA, you can’t put your money back in without having the amount deducted from your annual allowance (unless it's specifically a Flexi-ISA), so be careful when you withdraw

How do I apply for an M&S ISA?

You can apply for an M&S Bank ISA using the following methods:

• Online
• Via the telephone
• By posting an application form

The quickest option is online, and you just need to create an account with a password, apply some basic personal information including your National Insurance Number, and then make a contribution to your account.

You must be at least 16 years old and a UK resident, and you cannot have opened or contributed to another Cash ISA with another provider in the current tax year.