Tesco ISA

How does an ISA work?

An ISA is an ‘individual savings account’. You can open one if you’re over 16 (18 for some products, including stocks and shares ISAs) and live in the UK. Any interest you earn on money you put in an ISA is tax-free, so it’s a worthwhile investment to make.

If you’re eligible to open an ISA, there’s a limit to how much money you can put in. This limit changes every financial year; for 2017/2018 the limit is £20,000. You can have more than one ISA, but you can’t go over your allowance in any one financial year.

Standard savings accounts, on the other hand, are liable to tax. If you’re a lower-rate taxpayer, you can earn up to £1,000 interest tax free; any interest you earn after that is subject to tax. For higher-rate taxpayers, the allowance is £500. If you earn £17,000 or less each year, you won’t pay any tax on your savings interest at all.

What ISAs are available at Tesco?

Tesco’s ISA offer is pretty straightforward. There are three available: an instant access cash ISA, a fixed-rate ISA and a junior ISA.

Instant access cash ISA: You only need £1 to open an ISA with Tesco. You can get to your money whenever you want by phone or by online transfer (there’s a limit to online withdrawals). Tesco’s instant access ISA is flexible, which means you can take money out and replace it within the same financial year, without it counting towards your annual allowance

Fixed rate cash ISA: If you’ve got money you can lock away for a year, then you could earn a higher interest rate. If you need the cash you can still withdraw it, but you’ll have to take all of it out and close the account. Early closure will also mean you get fined the equivalent of 90 days’ interest.

Junior cash ISA: This is only available to under-18s and anyone with parental responsibility for a child can open one for them. Teenagers aged 16 or 17 can open an account themselves. The money can only be withdrawn by the child when they reach 18, so it’s a great way to stash away cash for the kids without the temptation of being able to dip into it. The Junior ISA allowance for the 2017/2018 financial year is £4,128.

Why go with Tesco for an ISA?

Tesco has made it nice and easy for you to control your money and you can manage your ISA accounts online and via mobile banking.

It might feel odd opting to buy financial products from the same place that stocks apples and pears, but Tesco bank has been around since 1997 and 7.8 million people trust it with their savings. But while we know ‘every little helps’, sometimes we want a lot more, so make sure you’re getting the most out of your money and compare cash ISAs at comparethemarket.com

All information correct as of 31 March 2017.