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Best UK Cash ISAs – Fixed & Easy Access in 2020

Cash ISAs are a great way to earn interest on your savings as they have higher interest rates than most savings accounts. We've found the best ISAs for you invest in.
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Author: Edith Muthoni
Last Updated: March 24, 2020
Cash ISA
Cash ISA

A Cash Individual Savings Account (Cash ISA) has all the basic features and even works like your regular savings account, safe for the fact that the interests accrued from the accounts made here are tax exempt.

GBP with a calculator and balance sheet

It seeks to widen the tax-free income net of £1,000 granted to basic rate and £500 given to higher rate taxpayers while introducing the tax-free concepts to the additional rate taxpayers who don’t enjoy any tax breaks on their incomes. Cash ISAs are offered by accredited institutions regulated by the Financial Conduct Authority (FCA) whose deposits are insured by the Financial Services Compensation Service (FSCS).

Table of Contents

    MoneyFarm

    Our Rating

    • Transfer out your savings when you need to
    • Invest in highly diversified portfolios
    • A personal adviser to help you get started with your investment
    • Expert portfolio management

    What types of Cash ISA can I invest in?

    There are two types of Cash ISA, the Variable rate Cash ISAs (instant or easy access cash ISA) are the most flexible ISAs. As the name suggests, the interest rates offered by the account are variable, but you have instant access to your funds implying that you can withdraw at any time without having to first notify your ISA provider. Fixed rate cash ISA, on the other hand, refers to cash deposited that earn a fixed interest rate. The amounts deposited here are however locked for a specific period of time, two, three or five years, and initiating a withdrawal request attracts such penalties as the loss of interest.

    Top 10 Cash ISA Rates for 2020

    Reviewers Choice
    MoneyFarm
    Rating
    Rating
    Account Type
    Cash ISAs
    Minimum Initial Deposit
    £1,500
    Interest Rate
    8.1% - 55.2%
    United Trust Bank
    Rating
    Rating
    Account Type
    Fixed rate cash ISA
    Minimum Initial Deposit
    £15,000
    Interest Rate
    2.50% AER
    Leeds building society
    Rating
    Rating
    Account Type
    Fixed rate cash ISA
    Minimum Initial Deposit
    £100
    Interest Rate
    2.05% AER
    Principality Building Society
    Rating
    Rating
    Account Type
    Fixed rate cash ISA
    Minimum Initial Deposit
    £500
    Interest Rate
    2.03% AER
    Skipton cash ISA
    Rating
    Rating
    Account Type
    Fixed rate cash ISA
    Minimum Initial Deposit
    £500
    Interest Rate
    2% AER

    Why open a Cash ISA?

    • Higher interest compared to conventional saving accounts: You stand to reap more returns when you operate a Cash ISA than you would when opening such other savings accounts as the personal accounts offered by major commercial banks and building societies.
    • Less risky: Unlike the shares and stocks ISA or the Peer to peer lending ISA that invest your deposits into third-party ventures, money held in a cash ISA are shielded from the risks or market volatilities and default on loan payments.
    • Ease of access: Deposits into a variable Cash ISA are accessible instantly. This is unlike of the deposits held in other types of ISAs like the P2P lending ISA or stock ISAs where liquidation takes time or virtually impossible, especially where a P2P lender doesn’t have a secondary market for the investments.
    • FSCS protection: Cash ISA deposit-taking companies must be FCA regulated and their funds protected by the FSCS. This implies that even if your Cash ISA provider went under, FSCS will reimburse you up to £85,000 for funded accounts held with an accredited company.
    • Tax-free: The maximum tax break you can ever have is the £1,000 for a basic rate taxpayer. If you hold large cash deposits in different accounts that consistently earn you over £1,000 interest per annum, you are better off savings your cash in the tax-free Cash ISA, regardless of your tax bracket classification.

    What are the pros and cons of depositing into a Cash ISA?

    Pros

    • No age restrictions
    • Unrestricted access in the case of emergencies
    • Easy to register and manage online
    • Doesn’t require special skills and doesn’t expose your deposits to risks
    • Highly flexible transfers between different Cash ISA providers

    Cons

    • Penalties on premature withdrawals with a fixed rate Cash ISA
    • Incredibly low costs when compared to P2P and Shares & Stocks ISAs
    • Money stands to lose purchasing value over time when interest rates fall below the inflation rate

    Criteria used to rank the top ten Cash ISA

    Some of the factors that we took into consideration when vetting the different Cash ISA providers and coming up with the best nine include:

    • The annual rate of return
    • Ease of access to deposited funds
    • Minimum initial deposit
    • Regulation and protection
    • The time limit for fixed rate ISAs
    • Offers, bonuses, and promotions
    • Withdrawal penalties

    Top 10 Cash ISA Rates for 2020

    1. Moneyfarm Cash ISA – from 8.1%

    To open a Moneyfarm ISA account, you must be a permanent UK resident above 18 years and have at hand the required minimum deposit amount of £1,500. Account creation is free and the Moneyfarm processes both Transfers in and out free of charge.Additionally, you won’t be penalized for making early withdrawals.

    Moneyfarm ISA has consistently outperformed most other popular ISA companies, posting average minimum returns of between 8.1% and up to 55.2%. The high returns are made possible by the fact that the company invests your ISA deposits in highly diversified stock and share portfolios. The portfolios are managed in-house by Moneyfarm’s team of experienced money market traders and dedicated towards the low-risk and highly rewarding global ETFs.

    Our Rating

    • Yields higher annual returns than any other cash ISA
    • You get matched with a personal investment advisor that you can email, call or cat with online and in person
    • Easy to monitor the performance of your ISA deposit via the Moneyfarm mobile app
    • Charges an account management fee of between 0.35% and 0.75% per annum

    2. United Trust Bank Bond – 2.50% AER fixed

    United Trust Bank’s 7-year bond is probably the highest rewarding cash ISA you will come across today. It is a fixed rate ISA with a clearly spelled out set of terms and conditions that we encourage anyone looking for a high return Cash ISA to familiarize them with before signing up. These include the fact that you will need £15,000 as minimum deposit amount with the age limit for opening the account set at 16 years.

    You must present yourself at the bank branch or post office to open the account and make a deposit as they don’t allow online or on phone account opening or management. You can also transfer cash deposits from other Cash ISA but the banker doesn’t support transfer out. Additionally, interests accrued are available for tax-free withdrawal at every end of the year or upon maturity of the bond.

    • Above average interest rate
    • The flexibility of interest payments as can be withdrawn annually or at end of term
    • A wholly passive income stream
    • Charges for maximum withdrawals
    • Prohibitive minimum initial deposit

    3. Leeds building society – 2.05% AER Fixed

    The 5-year fixed rate ISA in the UK offered by Leeds Building Society also comes in handy for anyone looking to earn above average interests on their deposits while maintaining the integrity of their cash for a longer term. Some of the Cash ISA’s unique features include the fact that anyone above 16 years of age can open the account online, at any of the society’s branches or via post.

    You must, however, have £100 to deposit into the account with the minimum for subsequent top-ups set at £1. You can withdraw up to £300 cash from any of Leeds Building society branches but withdrawals that exceed this amount and up to £1000 must be preceded by a 48-hour notice. You, however, stand to lose one year’s years interest for the withdrawn amount implying that you will get back less than you deposited should you request withdrawals before the lapse of one year after opening the account.

    • Easy to open and manage online
    • Hands-free approach to income generation
    • No exposure to unnecessary risks
    • Interest falls to 0.05% for balances below £100
    • Punitive withdrawal terms

    4. Principality Building Society – 2.03% AER Fixed

    Principality Building society presents you with yet another 5-year fixed rate Cash ISA that promises 2.03% in returns. Account opening here is relatively straightforward and open to any UK resident above 16 years either online, via post or by presenting self at any of the society’s branches. The minimum initial deposit acceptable here is set at £500.

    You can also transfer in accruals from another Cash ISA provider. Transfers out and withdrawals attract a penalty in the form of annual interest rate loss for the amounts withdrawn or transferred.

    • FSCS protected deposits
    • Relatively easy online account opening and management
    • Supports transfers in and out
    • One may consider their £500 minimum deposit prohibitive

    5. Skipton cash ISA – 2% AER fixed

    You will like Skipton’s 5-year fixed rate Cash ISA if you have a lump sum disposable income of up to £1 million that you want to save and earn tax-free and fixed-rate interest from. Cash ISAs are relatively easy to open and manage online and require a minimum initial deposit of £500. It is also one of the most flexible fixed-rate Cash ISA we have come across as it supports monthly interest rate payouts.

    Ideally, you have up to seven days after account opening to deposit as much cash as you possibly can or transfer in from other Cash ISAs after which time the company may restrict further deposits without warning. Deposits between £500 and below £20,000 attract a 1.90% or 1.88% interest rate per annum paid annually or monthly respectively. Deposits in excess of £20,000, on the other hand, attract 2.0% or 1.98% interest rates per annum paid annually or monthly respectively.

    • Flexible interest rate payment options
    • Supports transfers in and out
    • FSCS protected deposits up to £85,000
    • Punitive withdrawals and transfers charged that lead to loss of one-year interest rate for withdrawn amount

    6. Shawbrook bank Cash ISA bond – 2.30% AER fixed

    You will also like Shawbrook Bank’s –year fixed rate cash ISA if you are looking for an easy to manage cash ISA with flexible interest payment options. The minimum initial deposit required for this account is set at £1,000 and you can only invest up to £250,000 in one account.

    Additionally, the account is easy to open and manage online and over the phone but cannot be opened in person at the bank or postal branches. You must also be above 18 years of age. Additionally, you have the option of choosing the annual interest payout at 2.30% per annum or at the rate of 2.28% per annum but paid monthly.

    Our Rating

    • Flexible interest rate payouts
    • Easy account management
    • 100% passive income source
    • The low maximum operating balance of £250,000 locks out high-income earners

    7. Newbury building society existing member account – 1.75% variable

    The Newbury building society’s Cash ISA that pays 1.75% interest rate per annum also ranks highly on the list of instant access Cash ISAs.

    You can open this account in person at the society branches or post office or even online as it only requires a minimum initial investment of £50, a minimum operating balance of £1 and a maximum operating balance or £1 million. You can also easily withdraw up to £500, while larger withdrawals require a prior written intention to withdraw or transfer funds to the company.

    Note that the 1.75% interest rate is only available to existing members who have been with the society for over 1 year while new members earn 1.50% interest.

    Our Rating

    • Easy to open and maintain the account
    • Affordable minimum initial deposits and minimum operating balances
    • Immediate access to funds
    • Discriminative treatment of new and existing members
    • Rigid interest payment plans – no monthly payment plans

    8. Coventry building society Cash ISA– 1.50% Variable

    The Coventry Building Society’s easy access account is specially designed for anyone looking to earn tax-free on their savings and still maintaining instant access to their funds. Opening the account with Coventry is quite straightforward and can be done online and in person via post of at the society’s branches.

    The account doesn’t have a specific minimum initial deposit amount but it has its minimum and maximum operating balances set at £1 and £250,000 respectively. Interest rates paid annually stand at 1.50% AER per annum while the monthly interest rate is set at 1.48% per annum.

    • Flexible interest payment plans
    • Easy account opening and management online
    • Unrestricted access to your cash – no withdrawal penalties
    • The 1.50% interest falls below the average inflation rate that averages 1.9%

    9. Secure Trust Bank 60-day cash ISA- 1.65% variable

    Secure trust bank will also pay you 1.65% interest for the funds deposited into their 60-day notice Cash ISA. This works like every other easy access ISA with the only exception being the fact that you have to issue the bank a 60-day notice before capital withdrawals.

    Setting up the account is fast and quick as it can be done online, in person at the bank branches or via phone. The minimum initial deposit and operating balance are set at £1,000 while the maximum operating balance stands at £1 million.

    Our Rating

    • No withdrawal penalties
    • Interest accrued is payable quarterly or annually
    • Easy to open and manage the account online
    • The 60-day notice to capital withdrawal beats the meaning of easy access

    Easy Access ISAs

    What if you were able to deposit cash into a tax-free savings account, earn higher than average interest rates, and still have access to all or a portion of it whenever you wanted? That is what most easy access ISAs, also referred to instant access cash ISAs, are all about. Hand holding coins growing a small plantThey give you the chance to take advantage of your annual tax-free ISA allowance of £20,000 without having to lock it in a fixed deposit or lifetime savings accounts that are dogged by complicated withdrawal or cancellation processes.

    While most of the Easy Access ISAs tend to bring in slim returns when compared to their fixed rate counterparts, they cover up for this with their unmatched flexibility. You don’t have to issue a 30-day capital withdrawal notice to your ISA provider. And never will they cut back on the interest earned on deposits should you decide to close the account or transfer your funds to another provider. But why do you need to deposit into an easy access ISA and what are best options currently available:

    Note: When compared to the fixed rate and shares and stocks ISAs, Easy Access ISA will almost always post lower returns. But they compensate for this with instant and unrestricted cash withdrawals.

    Best Easy access ISAs: Reviewer’s choice

    Reviewers Choice
    Newbury building society
    Rating
    Rating
    Account Type
    Existing members account
    Minimum Initial Deposit
    £50
    Interest Rate
    1.75%
    Marcus Goldman Sachs
    Rating
    Rating
    Account Type
    Marcus Online Savings Account
    Minimum Initial Deposit
    £1
    Interest Rate
    1.50% with 0.15% bonus
    Virgin money double take
    Rating
    Rating
    Account Type
    Double Take E-ISA
    Minimum Initial Deposit
    £1
    Interest Rate
    1.50%
    NatWest Savings Builder
    Rating
    Rating
    Account Type
    Savings Builder account
    Minimum Initial Deposit
    £1
    Interest Rate
    1.50%
    Coventry Building Society
    Rating
    Rating
    Account Type
    Easy Access Cash ISA
    Minimum Initial Deposit
    £1
    Interest Rate
    1.50%

    Why should you deposit into an easy access ISA?

    • No unnecessary account restrictions: You don’t need to notify the deposit taker before making a withdrawal or have a maximum amount of funds that you can withdraw from your savings per day. And neither do you have to keep worrying about losing interest when you withdraw your accumulated deposits if you operate easy access ISA.
    • Bonus if you don’t withdraw cash: The interest rate for most of the easy access ISAs may be variable but most providers are willing to give you a fixed rate bonus if you don’t make significant withdrawals for a specified period of time, usually 12 months.
    • Can withdraw and replace without counting towards your tax-free limit: For the financial year 2020/2021, you can deposit a maximum of £20,000 into an easy access ISA. Refunding money into a previously withdrawn easy access ISA doesn’t, however, count against your allowable limit. This implies that you can withdraw the £20,000 and replace it later without losing the tax-free wrapper.
    • Instant access to funds: The easy access ISA ensures that you have instant access to your money whenever you need it.
    • Tax-free income: Interest earned on the conventional savings accounts maintained by the banking industry is taxed as ordinary income. Returns from ISA easy access savings accounts are on the other hand wholly tax-exempt.

    What are the merits and disadvantages of saving cash in an easy access ISA?

    Pros

    • Lowest minimum operating balances
    • Tax-free benefit ensures you get to take home more than you would with a conventional savings account
    • Most versatile as it can be quickly converted into virtually any other type of ISA
    • You can make withdrawals whenever you want
    • There is no lock-in period and deposits start earning interest immediately
    • Your deposits are protected by the FSCS

    Cons

    • Most don’t have a fixed interest rate and it keeps fluctuating
    • The easy access to cash raises your temptation to spend
    • Some easy access ISA providers will lower your interest if you treat it like a current account
    • Low interest and no lock-in periods demotivate your need for committing to a savings plan

    Criteria used to rank the best performing easy access ISA providers

    There is more to easy access ISAs than just instant withdrawals and attractive annual interest rates. And our vetting process takes into consideration every aspect of the account that affects not just how much you make but its flexibility and how easy it is to interact with. Here are some of the factors that we prioritized when coming with this list include:

    • Interest rate
    • Bonuses offer and promotions
    • Versatility in the account opening and management
    • Withdrawal terms and conditions
    • The ISA provider’s reputation
    • Support for transfers in and out
    • Support for switching from and to other types of ISAs
    • FCA regulation and FSCS protection

    Best Easy access ISAs:

    1. Newbury Building society existing members account – 1.75%

    Newbury building society offers the best interest rates for an easy access ISA for individuals that have been with the society for more than 1 year. The rates gross at 1.75% for the account that can be opened by any United Kingdom Resident above 16 years and living within the society’s service areas.

    You will also need an initial deposit amount of £50 for the account that has its maximum operating balance set at £1 million. New member accounts that haven’t been with the society for at least one year have their annual interest rates set at 1.50%.

    Our Rating

    • Has an affordable minimum deposit and operating balances
    • Can be easily managed online
    • Automated daily interest calculation starts immediately after making a deposit
    • Doesn’t accept transfers in from other cash ISAs
    • Not available countrywide

    2. Goldman Sachs’ Marcus Online Savings Account – 1.50% with 0.15% bonus

    Goldman Sachs recently launched an online bank, Marcus, whose savings account supports ISA deposits and has its annualized rates at 1.50%.

    The account is available to every individual above 18 years and requires a minimum deposit of £1 with the maximum operating balance standing at £250,000. It can only be opened online but supports both online and on-phone management and customer support.

    Marcus is a considerably versatile easy access ISA account given that you have the freedom to make unlimited withdrawals and deposits into the account without the need for notices.

    • Lives true to the ideals of an instant access account
    • Attractive interest rates
    • Relatively easy online account opening and management
    • The 1.5% is inclusive of a 0.15% bonus for the first 12-months implying that rates fall back to 1.35% afterward.

    3. Virgin Money Double Take E-ISA – 1.50%

    At 1.50% per annum, Virgin Money offers you some of the highest interest rates currently available in the banking world in exchange for easy but limited access to your deposits. Unlike most other easy access accounts that grant you unrestricted access to your ISA funds, you can only make two free and unregulated withdrawals from Virgin Money’s Double Take ISA per annum.

    The account is available to anyone above 16 years and requires a minimum initial deposit of £1. You can only open and operate the account online and but it also accepts inbound transfers in the form of cash ISA or shares and stocks ISA.

    • Easy online account opening and management
    • Affordable minimum initial deposit and operating balance
    • Supports cash additions into the account long after it was created
    • Interest is not static but is subject to change

    4. NatWest savings builder – 1.50%

    NatWest has also come up with an easy access ISA that rewards regular savers referred to as Savings Builder account. The interest rate for the account stands at 1.50% on condition that you grow your account savings by at least £50 every month. And if you don’t deposit or deposits less than £50, you won’t earn interest for that specific month.

    The 1.50% interest is also awarded to the first £10,000 with anything else above amount this attracting an interest rate of 0.20%. According to the banker, there is no minimum deposit required to open the account that is now available to any U.K resident above 16 years.

    Our Rating

    • Highly flexible
    • Encourages a saving culture
    • Versatile account opening and management via phone, online, and the brand's smartphone app
    • The account is only available to existing NatWest current account customers

    5. Coventry Building Society Easy Access Cash ISA – 1.50% (with 0.30% bonus)

    Coventry Building Society Easy Access ISA also soars high on the list of most versatile and highly flexible cash ISAs. Take, for instance, the minimum initial deposit required to open this account is £1, the easy access ISA can be opened and operated online. Plus there is no limit to the number of withdrawals you can make during the life of the account. It also accepts inbound transfers from other cash ISAs, shares and stocks ISA, and help to buy ISAs.

    The easy access ISA is also a pure savings account meaning that you can continue depositing additional and unlimited savings here and still benefit from the 1.50% interest rate.

    • Supports multiple inbound transfers
    • Available to every U.K resident above 16 years
    • Interest payable monthly or compounded
    • The 1.50% includes a 0.35% bonus fixed rate for the first 12 months after which the rates will fall to 1.15% onwards

    6. Skipton Building Society Easy access ISA- 1.48% + 0.48% bonus

    You will also like Skipton Building Society’s easy access dubbed Online Bonus Cash ISA if you are after an account that offers a mix of both flexibility, instant withdrawals, and attractive interest rates that currently stand at 1.48%. Opening the instant access account with Skipton is relatively straightforward and available online.

    Anyone above 16 years can open the account that doesn’t have a minimum opening or operating balance. You can also withdraw funds as many times as possible without the need to notify the society and put back as much cash as you can within the same financial year without affecting your annual ISA allowable limit.

    The building society will also welcome inbound transfers for your current and previous ISA contributions from another ISA provider to a maximum £1 million.

    • Supports inbound transfers
    • Affordable minimum deposit and expansive maximum operating balance
    • Supports unlimited withdrawals living true to instant access account ideals
    • The 1.48% rate includes a 0.48% fixed promotion for the first 16 months implying that the rate falls back to 1% per annum after this

    7. Sainsbury’s Bank defined access saver – 1.47%

    Sainsbury’s offers one of the top UK ISA accounts out there. You must be above 18 years to open the Sainsbury’s Bank’s easy but limited access ISA account, commonly referred to as the Defined Access Saver.

    The minimum initial deposit and operating balance for the account are set at £1 but you are required to maintain a balance of between £1,000 and £500,000 if you hope to enjoy the relatively high-interest rates of 1.47%.

    There is also a caveat with regards to the account management where rates are bound to decrease significantly, dropping to 0.50% per annum, if you make more than three withdrawals annually. The account can be opened and managed online 24/7 and at £2 million, it has one of the highest maximum operating balances we have come across so far.

    Our Rating

    • Application and account opening takes a few minutes
    • Relatively high interest rates that doesn’t include bonuses
    • Deposits here are FSCS protected
    • The banker subjects your savings to lower interest rates if you make more than three withdrawals per annum VISIT SAINSBURY

    8. KentReliance easy access cash ISA- 1.46%

    Another great addition to the list of most versatile easy access accounts is the easy access cash ISA by KentReliance that promises up to 1.46% in interest on your savings per annum.

    The interest is paid annually. You can open the account if you are above 16 years and have a minimum initial deposit of £1. Some of the most versatile and unique features of the ISA provider include the fact that it supports inbound transfers from other Cash ISAs, shares and stocks ISAs, and help to buy ISAs.

    And that you can open the account online, or in person at their branches or via the post. Its management and operation can be done online, on phone or in-person.

    Our Rating

    • No notice needed for withdrawals
    • No withdrawal conditions, and refunds within the same financial year won’t affect your ISA allowance
    • Easy account opening and management over several fronts
    • Doesn’t support additional monthly savings into the account after the first deposit
    • High interest only available to accounts with a minimum balance of £1,000 others attract a 1.31% interest rate

    9. Paragon Limited Edition Easy Access ISA – 1.45%

    Paragon bank describes its easy access ISA as the best fit for anyone looking for an account that is relatively easy to open and manage online at an attractive interest rate of 1.45% AER per annum.

    The account draws its uniqueness from the fact that you can have the interest paid monthly or annually. The account will also remain open, giving you a chance to make additional deposits as it has the maximum operating balance set at £100,000.

    Additionally, opening an account with the banker is quite straightforward as you only need to be a United Kingdom permanent resident, aged above 18 years and with an initial deposit of £1.

    Our Rating

    • Unrestricted and unlimited number of withdrawals annually without hurting your interest rates
    • Can be opened as a single or joint account
    • FSCS protected deposits
    • The £100,000 maximum operating balance may be considered low and limiting

    10. Cynergy Bank Online access account – 1.43% + 1.17% bonus

    Wrapping up our top ten list is Cynergy Bank’s online easy access cash account whose interest rates start from 1.43% AER per annum. The account can be opened by anyone above 18 years of age and requires an initial minimum deposit of £1 with the maximum operating balance set at £1 million. The account can only be opened and operated online and it doesn’t support inbound transfers from other ISAs.

    It is however highly versatile and supports unlimited and unrestricted withdrawals throughout the year.

    Our Rating

    • No account management fees
    • Supports an unlimited number of withdrawals without impacting the interest rate or subjecting the account holder to penalties
    • Low minimum operating balance and attractive
    • Doesn’t support inbound transfers from other cash ISAs
    • The 1.43% interest rate includes an introductory bonus of 0.43% and will, therefore, revert to the normal 1% after 12 months

    Bottom line

    There is countless number of easy access cash ISAs currently available in the money markets and each has its unique feature be it the high interest, unrestricted access to funds or flexibility. Finding the best instant access account to deposit your savings  starts with identifying your priorities and matching them to a particular account. For instance, if you are looking for highest interest for a short term savings account, consider going after ISA providers that offer 12- or 16-month fixed rate bonuses. If on the other hand, you look forward to saving for a longer term, consider going after ISA providers that allow for additional deposits into these accounts.

    MoneyFarm

    Our Rating

    • Transfer out your savings when you need to
    • Invest in highly diversified portfolios
    • A personal adviser to help you get started with your investment
    • Expert portfolio management

    Glossary of ISA Terms

    Cash ISA

    A cash ISA is a form of Personal Savings Allowance that works like ordinary savings account safe for the fact that you don’t pay tax on interests earned. It is tax-free savings account for UK citizens. The maximum you can invest in this ISA for the year 2020 is £20,000

    Stock and Shares ISA

    A share and stock ISA is a tax-free investment account provided by a brokerage that lets you invest in a wide range of securities including individual shares and stocks, trusts, and funds. Tax-free means that you don’t get to pay dividend tax or capital gains tax on the shares and stock incomes. The maximum you can invest in this ISA for the year 2020 is £20,000

    Innovative Finance ISA

    Innovative Finance ISA is a tax-free investment account that lets you invest in the peer to peer lending platforms. The maximum you can invest in this ISA for the year 2020 is £20,000

    Junior ISA

    A junior ISA is a tax-free and long term Child Trust Fund that a parent or guardian can open for their underage children. A 16-year old can also open a Junior ISA but will only access the funds therein once they turn 18. The maximum you can invest in this ISA for the year 2020 is £4,368

    Property ISA

    A property ISA is simply a share and stock ISA that will only invest in residential real estate properties. It is a share and stock ISA that buys solely into residential property portfolios.

    Lifetime ISA

    A lifetime ISA is a savings account available to individuals between 18 and 40 years who are looking to save for a comfortable retirement. A Lifetime ISA account holder can deposit £4,000 into the account for 2020, and with every contribution, the government tops it up with a 25% bonus. You will not be able to contribute to the ISA once you reach 50 years and the funds can be used for retirement or re-channeled towards purchasing your first home.

    Easy Access ISA

    An easy access ISA is simply a form of cash ISA that makes room for regular withdrawals of earned profits. It is mostly associated with cash ISAs that pay variable terms and allows you to withdraw the tax-free income gained here regularly. The maximum you can invest in this ISA for the year 2020 is £20,000

    Fixed-Rate ISA

    A fixed-rate ISA is a form of Cash ISA that pays fixed interest rates on savings. The funds in the account have to be locked for a predetermined period of time – usually between 1 and 5 years- with premature withdrawals attracting heavy penalties.

    Retirement ISA

    A retirement ISA is a savings account available to individuals between 18 and 40 years who are looking to save for a comfortable retirement. A retirement ISA account holder can deposit £4,000 into the account for 2020, and with every contribution, the government tops it up with a 25% bonus. You will not be able to contribute to the ISA once you reach 50 years and the funds can be used for retirement or rechanneled towards purchasing your first home.

    Help-To-Buy ISAs

    A Help To Buy ISA is a special saving account designed by the U.K. government to help its citizens save for a mortgage deposit for their first home. You can only save up to £200 per month into the help to buy ISA with the government topping you up with an additional 25% bonus. Plus, help to buy ISA is only available to individuals and couples looking to buy their first home.

    FAQs

    Who can open cash ISA?

    A United Kingdom resident above 16 years of age is eligible to open a tax free cash ISA. However, Cash ISA providers have the right to express discretion when admitting clients and some will only approve membership of individuals above 18 years.

    Where can I open cash ISA?

    The financial conduct authority (FCA) is charged with the mandate of regulating financial services providers and also maintains a list of all the accredited institutions allowed to offer ISA services. These include commercial banks, building societies, online financial services providers, and even the post office.

    How can I withdraw /transfer funds from cash ISA?

    The Cash ISA withdrawal process is largely dependent on the type of cash ISA. Withdrawing from an easy access cash ISA is pretty straightforward and can be done at any time without even informing the ISA provider. If the ISA provider requires written notice before capital withdrawal, they will disclose this at the time of opening the account, thus the birth of the 60- and 180-day notice cash ISA. Withdrawing from a fixed rate account is however more complicated. Intention to withdraw or transfer funds from an active account must be made in writing to the ISA provider. Some will then charge a pre-determined holding fee or deny you one-year interest rates for the amounts withdrawn. In such a case, you stand to get less than your deposit should you withdraw or request a transfer before the account's first anniversary.

    How much can I deposit into cash ISA?

    You can invest up to £20,000 tax-free into one cash ISA in one financial year. The Cash ISA provider, however, can express their discretion in determining the maximum operating balance allowable in the account. Keep in mind that the FSCS will only reimburse up to £85,000 should the provider go under.

    Do I have to pay to open a Cash ISA?

    No, opening cash ISA is free. The service provider, however, has the right to express their discretion when determining the minimum initial deposit required.

    Can I open multiple cash ISAs?

    Yes, you can open several Cash ISAs with different service providers but only deposit into one in any given financial year.

    Can I switch from cash to stock and shares ISA?

    Yes, you can easily switch from cash ISA to a shares and stocks ISA and vice versa. If your current Cash ISA provider doesn’t offer shares and stocks trading services or just don’t like their average returns, you can request a transfer of your funds to your preferred shares and stocks ISA provider.

    How safe is the Cash ISA?

    Before signing up with a Cash ISA provider, ensure that they are registered and regulated by the Financial Conduct Authority (FCA). This effectively means that their services are protected by the Financial Services Compensation Service (FSCS) and thus safe. Should the cash ISA provider go bankrupt or experience challenges that inhibit its operations, the FSCS is charged with the responsibility of refunding customer resources. In case of bankruptcy and misappropriation, your Cash ISA deposits are insured to a tune of £85,000 per ISA provider account.

    What is an easy access ISA?

    An easy access ISA is a type of cash account that lets you deposit up to £20,000 annually into a savings and earn tax-free interest while giving you the freedom of unrestricted and unregulated withdrawals. Unlike its fixed rate counterpart that locks your deposits for a specific period of time, the easy access makes it possible to withdraw as much as you want whenever you want without notifying your ISA provider.

    Will I lose interest or be penalized for withdrawals?

    You don’t have to issue a 30-day cash withdrawal notice to your ISA provider when operating an easy access ISA. You can withdraw as much as you want from the account without the fear of being subjected to such penalties as loss of interest.

    Do I have to pay to open an Easy access ISA?

    Opening an easy access ISA account is free across the board and no deposit taker should charge for account opening or charge a maintenance fee. Most will, however, demand that you commit to the account with predefined initial deposit amount immediately or within a few days of opening the account. The ISA provider has the right to express their discretion when determining the minimum allowable initial; deposit on their platforms.

    How much can I save into an easy access ISA?

    During the financial year 2020/2021, you can only save as much as £20,000 into an easy access ISA. There is no limit to the amount of money you can transfer into the easy access ISA drawn from other ISAs. You might, however, want to consider checking the maximum operating balance allowed by your ISA provider before initiating a funds transfer request with your current ISA deposit taker.

    How safe are my deposits in the easy cash ISA?

    Most of the ISA providers have been vetted, approved, and are regularly monitored by the Financial Conduct Authority (FCA). Your deposits with these financial services providers are also insured to a maximum of £85,000 by the Financial Services Compensations Scheme (FSCS).

    Can I switch from easy access can ISA to fixed rate or shares and stocks ISA?

    Yes, the easy access is considered one of the most versatile individual Savings Accounts (ISAs) and can be easily converted to fixed rate ISA, Shares and stocks ISA or the lifetime ISA.

    How will I know when the interest rate on my easy access ISA changes?

    The interest rate awarded to most easy access ISAs is variable and bound to change in relation to changes in the economy. Most ISA providers appreciate this fact and devoted a section in their terms and conditions to explain the different factors necessitating an interest rate change and how it is effected as well as how the provider communicates such changes with the clients.

    Is there a time limit for easy cash ISA?

    No, unlike the fixed rate ISAs that have their deposits locked for a number of years or months, there is no time limit to how long cash can be held in an easy access ISA. Most deposit takers will, however, attempt to encourage the holding of funds for a significant period by offering bonuses for cash held in an account for a long period.

     

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    Edith is an investment writer, trader, and personal finance coach specializing in investments advice around the fintech niche. Her fields of expertise include stocks, commodities, forex, indices, bonds, and cryptocurrency investments. She holds a Masters degree in Economics with years of experience as a banker-cum-investment analyst. She is currently the chief editor, learnbonds.com where she specializes in spotting investment opportunities in the emerging financial technology scene and coming up with practical strategies for their exploitation. She also helps her clients identify and take advantage of investment opportunities in the disruptive Fintech world.

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