The Best ISA Accounts

ISA’s (Individual Savings Accounts) have long been considered a sensible and practical option for putting money aside for the future. They essentially work just like any other savings account: either with the option of a flexible process of depositing and withdrawing money, without any restrictions on how long the money as to be in the account before it can be taken out again, or any long time periods for withdrawals, or the option of restrictions on withdrawing money in exchange for better, more secure interest rates. However, the big difference between a standard savings account and the ISA is that the interest that you receive on your savings in an ISA account isn’t taxed, so higher rate taxpayers are saving 40% and basic rate taxpayers are saving 20% that would otherwise be lining the taxman’s pockets.

Anyone over the age of 16 can open an ISA and as long as the money is kept in the ISA then it will sit there earning tax-free interest on an ongoing basis. It is possible to have more than one ISA but there is an annual limit on the amount that each individual can deposit into this form of tax-free savings – £5,760 – and if you have more than one ISA these ISAs will usually be from different years. It is also possible to transfer the cash from an old ISA into a new ISA that offers a better deal – there’s no obligation to leave the money where it is once it’s there. The Financial Services Compensation Scheme ensures that ISAs with a UK regulated bank or building society account are protected up to the value of £85,000 per person per financial institution, which also makes ISAs a very secure way of saving.

If you think this sounds like the kind of saving you’d like to get into then here are three of the best ISAs around at the moment:

The Regular Saver ISA from the Newcastle Building Society is a winner in terms of interest as it offers 3% if you don’t withdraw cash and can deposit £1-500 each month. Interest is paid monthly (if you withdraw cash one month or don’t make a deposit then that month’s interest drops to 2%) and there are no withdrawal penalties.

The NS&I Direct ISA claims to be the only provider that protects 100% of the cash deposited with it. The interest rate is 2.25% variable and so will change depending on factors such as the Bank of England base rate. Interest is paid annually and the minimum deposit is £1.

The Cheshire Building Society ISA offers a unique rate bonus of 1.8% until October 2014, which is effectively a rate guarantee. It is postal access only and offers a slightly lower rate than some other ISAs (2.3%) but the 1.8% rate guarantee is a great way to get some security on a chunk of the interest rate offered.

Whatever the ISA that you choose, you will find that this is a much easier and more efficient way to save money than most savings accounts. Taking advantage of the tax-free element means more money can be freed up to cover other essentials and expenses.

If you are facing financial problems, and would like to speak to one of our advisors about your money options in confidence, please call Jemima Poppy today on 01908 232879.