Four common myths you might have heard about ISAs

Article

  • Luke Pummell

    Head of Product Management

Did you know that Individual Savings Accounts (ISAs) allow you to save up to a certain limit without paying any tax on the interest you earn?

If you've never had an ISA before, or you're new to saving, it can be easy to get confused by all of the information out there.

  • You need a lump sum to open an ISA

    You don’t need a lump sum to open an ISA - our Easy Access Cash ISA can be opened with just £50.

    ISAs can also be a good way to get into a 'little and often' saving habit, because you can add to them whenever you like provided you don’t exceed your annual limit.

  • You have to lock your money away for an extended period

    Some savers avoid ISAs because they think they’ll have no access to their money. We know how important immediate access to your savings can be, but that doesn't mean you can't reap the tax-free rewards.

    With an easy access cash ISA, you can withdraw money without any notice period or penalty.

  • You can’t replace funds you’ve withdrawn from an ISA

    You might have heard people describing ISAs as being ‘inflexible.’ This generally means you can’t replace money the money that you have withdrawn. However, in 2016, the government changed rules to allow providers to offer more flexibility.

    This was an optional change, so it's worth checking with your ISA provider if you're unsure. You can learn more about ISA flexibility here.

  • You can’t move ISAs to other providers without losing the tax-free status

    This is where ISA transfers come in handy – accounts can be moved from one provider to another, meaning your money will be retained in an ISA and remain tax-free. Both our Easy Access and Notice Cash ISAs accept transfers in from other providers, so now is a great time to review rates on your old accounts. Transferring your ISA does not count toward your existing year's allowance.

Don’t forget!

Your ISA allowance can’t be 'rolled over' from one year to the next, so if you don't use it by 5 April, it'll be gone. For more information on our savings accounts, pop into your local branch, call 01635 555700, or book an appointment with a qualifed savings adviser.