Compare Sainsbury's ISAs

Who are Sainsbury’s Bank?

Sainsbury's Bank are a UK bank founded in 1997, wholly owned by Sainsbury’s.

Originally launched as a joint venture with Lloyds Bank, in 2014 Sainsbury’s purchased the 50% share owned by Lloyds, making them the current sole owners.

Sainsbury’s Bank offer a range of loans, mortgages, savings accounts and insurance products. Among their savings account products are Cash ISAs, which come with fixed and variable interest rates.

What is an ISA account?

ISA stands for Individual Savings Accounts, and they are savings accounts with added tax benefits.

In a standard savings account, you can be liable for income tax on the interest and dividends your investments produce along with capital gains tax on your investment growth.

However, within an ISA, your investments are tax-free forever, no matter how well they perform.

The government permits all individuals to invest up to £20,000 in an ISA account each tax year.

What type of ISA is a Sainsbury’s ISA?

There are two main types of ISAs: Cash ISAs and Stocks and Shares ISAs. They are both the same in terms of how much you can invest and the tax benefits you get, but differ in what underlying products they can invest in.

Cash ISAs are cash products that return a guaranteed or variable rate of interest. Your investment can’t lose money (unless you are charged for withdrawing before your term), but interest rates are fairly low in the current market.

Stocks and Shares ISAs allow you to invest directly in the stock market. This could be in shares, funds, bonds or any other type of investment, so the return potential is much higher. However, your investments can go down as well as up in value and you could get back less than you originally invest.

Sainsbury’s Bank offer Cash ISAs but do not currently provide a Stocks and Shares ISA account.

What types of Cash ISAs do Sainsbury’s Bank offer?

Sainsbury’s provide two main types of Cash ISAs: fixed-rate Cash ISAs and variable-rate Cash ISAs.

Below are the key account details for each product.

Fixed-rate Cash ISAs:

1. Fixed-terms range from 1-5 years
2. Higher interest rates for longer terms
3. A portion of your interest is void if you withdraw before the end of your fixed term
4. Your interest is paid on an annual basis
5. Invest with a minimum of £5,000

Variable-rate Cash ISAs:

1. Lower interest rates compared to fixed-rate ISAs, and rates can fluctuate
2. You can withdraw as much as you like at any time
3. Annual interest payments
4. Invest from as little as £1

How do I open a Sainsbury's Bank ISA?

You can open an ISA account by registering for an online login and then choosing your preferred account to invest in.

Contributing funds to your account will officially open it, and the entire process can be completed in a matter of minutes.

Application Checklist:

1. You need your address and postcode(s) for the last 3 years
2. You need your National Insurance number to hand
3. You must have a mobile telephone number to provide
4. You must be a resident in the UK
5. You must be over 18

What are the rules surrounding ISAs?

No matter what type of ISA you’re investing in, it’s important to be familiar with the restrictions and limitations of the accounts.

If you break the rules, for example by contributing over your annual allowance, you could end up having your ISA subscription void along with the interest you’ve earned.

• The annual ISA allowance is £20,000 for the current tax year - don’t contribute above this limit.
• The allowance is split between all types of ISAs, so you can split your contributions between a Cash ISA and a Stocks and Shares ISA if you wish.
• You're not allowed to contribute to more than one Cash ISA in the same tax year. For example, opening a Sainsbury’s Bank fixed-rate ISA and variable-rate ISA in the same year is not allowed.
• The same rule applies to Stocks and Shares ISAs – you can’t open two in the same tax year.
• You can, however, open different Cash ISAs across more than one tax year.
• You can transfer existing ISAs to new ISA accounts and it won’t count as a contribution towards your ISA allowance.
• Your annual ISA allowance does not roll over – use it or lose it.
• The ISA allowance refreshes on 6th April in line with the tax year dates.