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ISAs

Choosing the best ISA

What is an ISA?

Individual savings accounts, or ISAs, let you save money and earn interest on up to £20,000 without paying any tax on what you earn. You’ll be given an allowance for every tax year, and for 2020/21 the allowance is £20,000, which you can put into a number of different types of ISA.

You must be at least 16-years-old to be eligible for an ISA.

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How do ISAs work?

Every year you’ll be able to open a new ISA and pay in up to £20,000 over the year. You can have several ISAs open at the same time, but keep in mind that after the first year your interest rate might be significantly lower.

In general, you’ll be able to deposit money by:

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Using your bank’s mobile phone app

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Logging into your account on a web-browser

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Phoning your bank directly

Most banks and building societies will let you withdraw money from your account to transfer it into another account you hold – but remember to check if you’ll lose your allowance or tax-free bonus as a result. 

What types of ISA can I open?

There are different types of ISAs available depending on your circumstances and requirements

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Cash ISAs

Cash ISAs let you protect your savings from the taxman and depending on the type of cash ISA you open you’ll often be able to access your money easily

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Stocks and shares ISAs

A stocks and shares ISA gives you tax-free returns on stocks and shares investments, and the investment decisions are taken care of by a fund manager

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Fixed-rate ISAs

A fixed-term ISA also offers tax-free savings, but you’ll get higher interest rates if you lock the money away without withdrawing any

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Lifetime ISAs

Lifetime ISAs are designed for people aiming to buy their first home or save for retirement 

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Self-select ISAs

A self-select ISA is similar to the above, however you’ll choose the shares to hold in your ISA rather than a fund manager

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Innovative finance ISAs

Innovative finance ISAs, also known as an IFISA, lets you earn tax-free interest on peer-to-peer loans

How do I apply for an ISA?

Finding the right individual savings account for you is quick and easy when you compare ISAs with MoneySuperMarket.

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Decide which ISA you need

Remember to factor in how soon you need to access the money and who it's for - you may require a junior ISA

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Compare with MoneySuperMarket

Once you’ve found the account you want, just click through to the provider to get started

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Open your new account

Complete your application on the provider’s website and start saving today

You can have a number of ISAs open at the same time, but keep in mind that after the first year your interest rate might be significantly lower.

It will depend on how your bank or building society lets you manage the account, but in general you should be able to deposit money by:

  • Using your bank’s mobile phone app
  • Logging into your account on a web-browser
  • Phoning your bank directly to organise a cash transfer

Most banks and building societies will let you withdraw money from your account to transfer it into another account you hold – however make sure to check whether you might lose your allowance or tax-free bonus as a result.

A Junior ISA is an account you can open on the behalf of a child that offers tax-free returns in much the same way as a standard cash ISA – however the child to whom the account belongs won’t be able to access the money until they’re 18. At this point it becomes a full adult ISA and they’ll take full control of the account.

Help-to-buy ISAs are no longer available to new customers, however if you opened one before 30 November 2019 you’ll still be able to use it and take advantage of the bonus it offers until November 2029.

They essentially offer a government bonus of £50 for every £200 you save towards a new home – to a maximum of £3,000. 

Flexible ISAs allow you to withdraw cash from your ISA at any time and return it by 5 April (so within the same tax year) without losing any of your allowance.

Your ISA will only be able to hold pounds sterling.

Yes – in fact this is recommended for the reason mentioned above. If you transfer funds from previous ISAs into your current one you’ll be able to take advantage of the better interest rate.

We’ve been made aware of a number of ways in which fraudsters are trying to use the MoneySuperMarket brand to try and trick consumers into handing over money, or financial details, by offering false ISA products.

If you think you’ve been contacted by a fraudster, please stop all communication with them and report it to Action Fraud. If it’s someone impersonating MoneySuperMarket, please contact our customer services team.

 

You can compare savings accounts using a number of factors. These include the interest rates they offer as well as how long the rate will last, the amount you might need to deposit in order to open the account, and how you can access the account. Once you’ve decided which account you want, simply click through and you’ll be taken to the provider’s website.

Not sure what type of account to go for? Our Savings Decision Tree can help you decide.

MoneySuperMarket gives you lots of clever ways to save a lot, by doing very little.

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We commit to providing you with clear and informative answers on all points such as this, so we have gathered the relevant information on this page.