What is an ISA?

by Brook J. i love to write

If you’re considering saving or investing this year, an ISA is a great way to get started. You may have heard friends and family talking about ISAs but are not sure exactly what they are or what’s involved; or you may be looking for some more advice relating to ISAs. Qualified accountants can offer you all the advice you need to ensure your savings and investments work hard for you. So what is an ISA?

A Simple Way to Save

Simply put, an ISA is a tax-free way to save or invest, wealth management and it’s good for those with little or no experience of saving or investing. With a regular savings account you’ll pay income tax on any interest earned. With a cash ISA, interest earned is free from tax, which means more money in your pocket. There are also stocks and shares ISAs, which are ideal if you’re new to investing and looking for a tax-efficient option.

What is an ISA Allowance?

The amount you can pay into an ISA has an annual cap – this is known as your ISA allowance. Each tax year (commencing on 6th April), you start a new allowance. For 2018/19, you can save or invest up to £20,000 in a cash ISA or stocks and shares ISA.

The Flexible Choice

Unlike term or notice savings accounts, where your money may be inaccessible for a fixed period or you may have to give notice to access your cash, ISAs & Xero Cloud Accounting are a flexible option. You can withdraw funds and pay in without it counting towards your annual ISA allowance, if you’re careful.

Many banks and building societies offer a choice between an instant access ISA and a fixed rate ISA – the latter being the best choice if you have a lump sum of cash to save.

Other ISA Options

You may also hear about Help to Buy ISAs, which are designed to help you save to buy your first home, and Junior ISAs, which help parents to save for their child’s future. With a Junior ISA, your child can’t access the funds until their 18th birthday. Stocks and Shares ISAs are a popular way to get started investing, as any gains you make are protected from capital gains tax and there is no need to declare your investments on your annual tax return.

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About Brook J. Advanced   i love to write

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Joined APSense since, April 20th, 2017, From york, United Kingdom.

Created on May 9th 2018 06:51. Viewed 677 times.


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