Cash ISA - This works very much like a regular savings account where you earn a percentage rate on your savings and have easy access to them at anytime. Our cash ISA is provided by Scottish Widows Bank and pays 2.5%(AER Variable). You can invest up to a maximum of £5,340 into our cash isa for the tax year 2011/12. This ISA may be more suitable for short term savings as you can have instant access to your account.
What is an ISA?
ISA stands for ‘Individual Savings Account’ and is a savings account where you get to keep all what you receive from the investment and do not have to pay tax on it. You do not have to inform your HM revenue & customs office that you have an ISA.
Are ISAs really tax free?
Yes, you pay no tax on any income you may receive from your ISA savings and investments. This also includes any bonuses or dividends.
You will not pay any capital gains tax on your isa investment as well.
What is the difference between your cash isa, stocks & shares isa and your fixed term deposit account.
Stocks & Shares ISA - This is where your money is invested into funds. We offer a choice of 3 different dynamic and actively managed funds including Cautious, Balanced & Adventurous which are all expertly managed by Prudential. You can invest up to a maximum of £10,680 into our stocks and shares isa for the year 2011/12. This ISA may be more suitable as a longer term investment when compared to our cash isa.
Fixed Term Deposit Account - This is a savings account where your money is held inside the account for a fixed amount of time (term). Our fixed term deposit account is provided by Scottish Widows Bank and currently offers a 4% AER over a 3 year fixed term. This account may be suitable for investors who are averse to taking a significant level of risk or who want to save for a fixed term as they know access to the funds will be needed at a Pre-determined time in the future. Please note that our fixed term deposit account is not an isa and does not offer tax free savings.
Am I eligible for an ISA?
To open an ISA you need to be a UK resident for tax purposes. To open a cash ISA you must be at least 16 years of age and for a stocks and shares isa, you need to be at least 18 years of age.
How many ISAs can I have?
You are only permitted to hold one cash isa and one stocks and shares isa at any time and they do not have to be with the same provider/manager.
What is the maximum amount I can pay into an ISA?
The current maximum investment limit for the tax year 2011/2012 which ends on the 5th April is £5,340 for a cash isa and £10,680 for a stocks and shares isa.
Please note that if you open both a cash and a stocks & shares isa account then the combined total investment limit is £10,680 (of which a maximum of £5,340 can be paid into a cash isa).
These limits will rise for the tax year 2012/2013 to £5,640 for a cash isa and £11,280 for a stocks and shares isa.
Can I open an ISA for my child/grandchild?
If the child is 15 or under then they are not permitted to hold an ISA account. However, in November 2011 the Junior ISA was launched which is very similar to an adult isa but the money/funds are locked away and can only be accessed by the child when they reach 18 years of age. Please note that any child who holds a Child Trust Fund is not eligible for a Junior ISA
For further details regarding the Junior ISA please visit the taxfreejuniorisa.co.uk website.