Saving money for the
future: An introduction to ISAs

Saving money for the
future: An introduction to ISAs

Whatever your goal maybe, there’s no better time to start thinking about saving money for the future. Within this post we explore ISAs and the different types available.

An Individual Savings Account (or ISA for short) is a tax free savings account, that means that any interest or investment returns you earn are not subject to tax, giving you that little bit more regardless of how much you save.

Being that an ISA is tax free, they are subject to a few rules; namely:

  • What you pay into an ISA each year cannot be greater than the ISA allowance (currently £20,000).
  • You can only have one “active” ISA each year, meaning you can’t open multiple accounts each year.
  • You can have multiple ISAs should you wish, as long as the total amount saved is less than your allowance in a given year.
  • Whilst your balance can increase overtime, if you take money out, you cannot put it back in the same way e.g. if you add in £100, withdraw £100 and add a further £100, you will have used £200 of your allowance.

You can pretty much get an ISA from any bank, building society and credit union (as well as lots of other places). There are two types of ISA:

  • Cash ISA – this is simply a savings account where the bank gives you an interest rate. There are lots of different types depending on your objective so do shop around.
  • Stocks & Shares ISA – compared, this account allows you to invest your allowance within stocks & shares, bonds and ETFs. Whereas a Cash ISA always pays interest, stocks & shares ISA are subject to gain and loss, meaning the value of your ISA can go down.

Within Quo Money you can add multiple savings accounts, including ISAs, allowing you to manually keep track of how much you save.