A simples guide

Post Office ISA

The Post Office has always been a hub of the community. It brings your mail to your door every day, right on the button, with a smile. Now it has brought those core values of reliability and customer service to the financial services market, so if you want a long-term savings plan then the Post Office ISA could be worth a look.


The Individual Savings Account market is a tough nut to crack and the major banks are fighting hard for dominance, but you might prefer the service or terms and conditions that go with a Post Office account. It’s a relative newcomer to the world of more complex financial products, but generations have trusted the Post Office with their personal savings.


Before you commit, use our comparison service to make sure you compare the Post Office ISA with the other savings accounts on the market.  


What ISA options do the Post Office offer?

The Post Office has a range of ISAs for you to choose from. These include the Online ISA (although it is not always available) which allows you to separate your cash ISA into both fixed-rate and variable rate accounts and manage it all online.

This means you can hedge your bets and ensure that at least part of your savings are fixed and can get the best interest rate. This rate is currently set at 1.10% which includes a 0.45% fixed bonus for the first 12 months. Interest is calculated daily and paid annually in March.  

You can also opt for the Premier Cash ISA. The interest rate on this Post Office cash ISA is currently 0.95%. You can start the account with just £100, it’s tax free up to the allowance and there’s a 0.3% tax-free bonus for the first 12 months. You can only make two cash withdrawals each year without incurring a penalty, though, so you have to be comfortable with locking the money up or you should look at alternative plans. 

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Other ISA options

A Fixed Rate Cash ISA gives you the peace of mind  knowing exactly what your returns will be and you can choose a one, two or three-year plan that come with incremental increases in the interest rate.

You can open a fixed-rate cash ISA with £500 and can deposit up to the £20,000 allowance for this new tax year.  You cannot make additional deposits. So once you have committed your initial amount, you cannot make additional payments for the rest of the tax year.

Junior ISAs are also available and these are a popular product with parents trying to provide for their child’s future, such as a deposit on a house or a helping hand with their university education. It’s a third-party product provided by OneFamily and is suitable for children under the age of 16, but it is a stocks and shares ISA that carries a higher level of risk. So consider your options, but if you decide to take the plunge then you can start it with a lump sum of £500 and deposit as little as £10 a month.

The money is secured until the child is at least 18 and there is a yearly management fee of 1.5% and an additional 0.2% in expenses. It’s a great way to save for your child’s future, but there are also other options available. 

Remember to compare the market

The Post Office is a British institution, but that does not mean you should commit to its products without looking at the alternatives first. Every major bank and financial institution has a range of ISAs and you should make sure you have compared them all before you commit.

All Post Office ISA details are based on information provided on postoffice.co.uk data on 19 April 2016

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