Guide On Isa Accounts

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Guide to ISA accounts

Different Types of ISAs

ISA stands for Individual Savings Account. This financial product is available to all residents in the U.K.

An ISA is designed for:

•  Savings – cash ISA

•  Investment – Stocks and Shares ISA

Why ISA?

•  ISAs give you tax-fee interest. You also do not have to pay tax on capital gains that you get from your ISA.

•  With an ISA-backed life insurance policy, you do not have to pay tax when the policy expires. Also, your insurer does not have to pay tax on income or capital gains on investments.

Anyone over 16 years of age can invest in different types of ISAs . For the tax year, 2010 – 2011, the total amount you can deposit in an ISA is GBP 10,200. For cash only ISA, the limit is GBP 5,100. The remaining money has to be saved in stocks or shares.

Of the different types of ISAs , the instant access account is the simplest. You can deposit or withdraw you money as you like, up to the limit. Once you have withdrawn money from your ISA, you cannot replace it.

A comparison of the different types of ISAs :

Investing for Income ISAs:

  • Morgan Stanley
  • Investec
  • Barclays Wealth
  • RBS

Investing for Growth ISAs:

  • Barclays Wealth
  • Investec
  • Morgan Stanley
  • RBS

Specialist Fund ISAs:

  • Aberdeen
  • First State Investments
  • Black Rock
  • J.P.Morgan

Ethical ISA funds:

  • Jupiter
  • Ecclesiastical
  • Schroders
  • Virgin Money

Cash ISAs:

  • Investec
  • RBS
  • Halifax
  • Scottish Widows Bank

For Cash ISAs that offer high rates plus guarantees, you could check out:

  • First Direct Cash e-ISA
  • Sainsbury’s
  • Intelligent Finance
  • National Savings & Investments Direct ISA

For fixed rate ISAs or fixed account ISAs, you deposit your cash (up to the limit), for a fixed period of time. This gets you higher interest. So, for different time periods, check out:

•  For 1 year:

  • Aldermore Bank
  • Barnsley BS

For 2 years:

  • Chelsea BS
  • Aldermore Bank

For 3 years:

  • Nationwide
  • Saga

•  For 4 years:

  • Halifax
  • Derbyshire BS

For 5 years:

  • BM Savings
  • Principality

A word of caution about different types of ISAs . The rates change, so be aware of the interest rates the various providers offer, before you opt for a particular deal.

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