The Student Room Group

What are ISAS and how do they work?

What are ISAS and how do they work?
I'm a complete novice when it comes to finance and banking so as brief and simple as possible please.


Posted from TSR Mobile
With ISAs, you can only have one each tax year. They are exempt from tax and there's a limit (I think it's now £15k per year) that you put in each year. But if you take money out, the limit you can then put in is the same. For example:
You put £10,000 in and wish to draw out £5000. You can still only put another £5000 in during that tax year.

There are two types of ISAs - cash and stocks and shares.

They generally pay a smaller amount of interest compared to savings accounts.
Reply 2
Avatar for Juno
Juno
20
ISAs are best for long term savings. You don't pay tax on interest, so they're better for when you're working - but you can build up savings as a student in an ISA and have it "waiting" for when you're a higher rate tax payer.

They're not designed for people who will need continual access to the money.

Posted from TSR Mobile
Original post by Juno
ISAs are best for long term savings. You don't pay tax on interest, so they're better for when you're working - but you can build up savings as a student in an ISA and have it "waiting" for when you're a higher rate tax payer.

They're not designed for people who will need continual access to the money.

Posted from TSR Mobile


Yes and no.

I have just £1 in my ISA, because all my current accounts give me a far better rate. Once I pay tax, the ISA will make me 0.1% better off, from one of my accounts

Martin Lewis recomends opening an ISA, in April (When they all compete for your money - I have an ISA for 2.5%, and I got one last year for the same amount), putting money in high interest savings accounts, then in March next year, transfer all that money across in to the ISA, making you more money, tax free, for years to come

Maybe a lil complex for OP though

OP:

ISA = untaxed savings account, generally used for long terms savings. Not always the best way to make the most of your money imo (Just because it's untaxed, it doesn't mean it beats savings/current account interest rates which are taxed)
(edited 9 years ago)

Quick Reply

Related discussions

Latest

Trending

Trending

Articles for you