ISAs

Cash ISAs are open to any UK resident aged 16 or over. To hold a stocks and shares or innovative finance ISA, you must be at least 18. Lifetime ISAs are open to adults aged 18-39 inclusive. With a junior ISA, a parent can open the account on behalf of their child, who’s under 18, with the child taking control of the ISA when they turn 16. 

ISA allowance rules mean you can have as many ISAs as you like. There’s no legal limit. However, you’re only allowed to pay into one of each type of ISA a year, which could make having multiple ISAs less useful to you. If you already have multiple ISAs of the same type, you might want to consider combining them into one, easier to manage, account. On the other hand, if your savings total more than £85,000, you might be better off splitting them between several ISAs at different providers. This is because your ISA is protected by the Financial Services Compensation Scheme (FSCS), but only up to a limit of £85,000. This means, if your ISA provider went bust, anything more than £85,000 would be lost. So, if you split your savings of more than £85,000 between different ISA providers, you can better protect your savings.  

If you’re not happy with your current ISA rate, you can switch providers. Never take out the money yourself as you’ll lose your tax benefits. Your new provider should be able to take care of the switch for you. A cash transfer should take no longer than 15 working days. If you transfer a stocks and shares ISA, it should take no more than 30 calendar days. 

Yes. You can open a Junior ISA on behalf of your child. Money deposited in the account belongs to the child, but they can’t withdraw it until they turn 18. Junior ISAs have a lower annual limit than adult ISAs at £9,000 for the 2024/25 tax year, but you can usually get better interest rates. 

If you think you’re unlikely to need access to your savings in the short term, consider a fixed-rate ISA. These usually offer better interest rates than instant-access ISAs. The longer you’re willing to put your money away for, the better rate you’re likely to get. 

You no longer need to save into an ISA to earn tax-free interest, so the benefits aren’t as great as they once were. Thanks to the introduction of the personal savings allowance, basic rate taxpayers can now earn up to £1,000 interest a year without having to pay tax on it. For most people that means all their savings will be tax-free. So, when comparing the best cash ISA rates, it’s also worth comparing savings accounts to see if they would offer you a higher return. Where ISAs can be particularly beneficial over time is if you open a Lifetime ISA or stocks and shares ISA. 

How you withdraw your money from an ISA will depend on what type of ISA you have. This is because there are different rules on withdrawal and how they impact any benefits you’re receiving. Here’s a breakdown of how to withdraw from each of the main types of ISA: 

• Instant-access cash ISAs – as the name suggests, you can withdraw from an instant access or flexible ISA whenever you like. 
• Fixed-rate ISAs – when opening the account, you’ll agree to lock your money away for a fixed term. If you want to withdraw your money before this term ends, you’ll likely face a fee and lose your tax benefits. 
• Junior ISAs – the child will be able to take control of the account at the age of 16, but won’t be able to withdraw money until they’re 18. 
• Stocks & Shares ISAs – you can withdraw your money at any time. However, if you decide to reinvest this money into the account, it will count towards your annual ISA allowance. 
• Lifetime ISAs (LISAs) – the money in a LISA can be accessed either when buying your first home or retiring. If retiring, you can withdraw some or all of the money when you turn 60. If you’re using the money to buy your first home, you’ll need to tell your LISA provider to transfer the money to your solicitor handling the purchase. If you don’t do this, you’ll be charged a 25% withdrawal penalty fee. 
• Help to Buy ISAs – when you’re ready to buy your first home, you’ll need to apply for your Help to Buy bonus through your solicitor. Don’t just withdraw the money, as you’ll lose your government and tax-free bonuses. 

Cash ISAs are a type of tax-free savings account, just like many of the other types of ISA. A cash ISA is one of the most simple and popular types of ISA, because it’s an easy way to save with that great tax-free benefit. You can save up to £20,000 a year, as part of your ISA allowance. 
 
There are many different types of cash ISA though, with options for flexibility, easy access, long-term savings and even kids. There’s bound to be an ISA to suit your needs, and we can help you find one. 

A flexible ISA is probably the simplest type of ISA, because there are fewer rules about when you can access your money. A flexible ISA allows you to withdraw your money at any time, meaning they offer the greatest accessibility and flexibility for saving: hence the name. However, because of this, flexible ISAs tend to offer lower interest rates than their fixed-rate or notice ISA cousins. This is because ISA providers use your money to make investments, which means allowing you to access the money whenever you like could disrupt their plans. That’s why ISA providers reward other, less flexible, accounts with better interest rates. 

No, according to the HMRC, you can only deposit and save Great British Pounds (GBP) into an ISA. If you’re looking to make a foreign currency deposit into an ISA, a currency conversion will need to be made at the same time.