You might know that Individual Savings Accounts (ISAs) currently allow you to deposit up to £20,000 each year without paying any tax on the interest. However, what many don’t know is your ISA allowance doesn't 'roll over' from one year to the next.
In other words, if you don't use it, you'll lose it! If you want to open an ISA before the end of the tax year or use up any ISA allowance you have left, here are some things to know.
You don’t need a lump sum
Not everyone has £10,000 knocking about, so it's good news that you don't need a lump sump to open an ISA. Our Easy Access Cash ISA, for example, can be opened in a branch or via post with a £50 minimum deposit.
Easy access ISAs can be a great way to get into the habit of saving. You can top them up whenever you like, with as little or as much as you have, as long you do not exceed your annual limit.
You can still have access to your money
Some people avoid ISAs because they think they’ll have limited access to their savings, which can be frustrating if you have an emergency. We know how vital access to your savings can be, but that doesn’t mean you can’t still reap the tax-free rewards of an ISA - easy access cash ISAs traditionally allow you to withdraw money whenever you like, meaning you're not at a loss if you have an emergency.
If you want to limit how often you can dip into your funds, why not explore a Notice ISA or an ISA Fixed Rate Bond?
A Notice ISA requires you to give a set period of notice before withdrawing your savings, while a Fixed Rate Bond locks in your interest for a fixed term and doesn’t allow deposits or withdrawals during that time.
Withdrawing and replacing money
If an ISA is flexible, it means you can replace any funds you withdraw without affecting your annual £20,000 allowance.
Not all ISA providers offer flexibility, so if it's important to you, make sure you check the terms and conditions of any ISAs you currently have or plan to open in the future.
Moving to another provider to make the most of rates and extras
If you’ve opened an ISA in a previous tax year, it’s worth checking your current interest rate. Although you can currently only pay into one ISA each financial year, your ISA funds can be moved from one provider to another as long as the new provider accepts transfers in, allowing you to make the most of better rates or benefits.
Whilst we have no plans to withdraw these accounts, they may be withdrawn without notice. Account terms and conditions apply.