Cash ISAs are like a normal savings deposit account, but with a limit to how much you can pay into them each year. Stocks and shares ISAs are another way to invest up to your annual ISA limit, in a fund that’s linked to the performance of the stock market. Here the value of your investment can go up or down, and you may get back less than you originally invested.
The interest on cash ISAs is tax free. This means that, while you normally pay income tax on interest in other savings accounts, you don't pay any on cash ISA interest. You do not pay any additional personal income tax or capital gains tax on any money you earn from a stocks and shares ISA.
You just need to be 16 or over to apply for a cash ISA, and 18 or over to apply for a stocks and shares ISA – and a UK resident for tax purposes in both cases. Crown employees living abroad (such as diplomats and members of the armed forces) can also apply.
You can often transfer your ISA (either type) between different providers – you will need to ask your new ISA manager to arrange the transfer for you. You can also move money from a cash ISA into a stocks and shares ISA without affecting your yearly allowance. But you can’t move a stocks and shares ISA into a cash ISA.
No. You can open many cash ISAs for as little as £1. Stocks and shares ISAs generally have higher minimum contributions.
During this tax year you can save up to £15, 000 in a cash ISA, a stocks and shares ISA or a combination of both options.
The tax year runs from April 6 in one year to April 5 in the following year.
Not at all. Many cash ISAs offer savers instant access to their money. Stocks and shares ISAs may be more appropriate if you are looking to invest for a period of 5 to 10 years.
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