Saving money can come naturally to some, but be more of a learned skill for others. Having an ISA, or Individual Saving Account, can help you to make your money grow within each tax year. Generally, the tax years in the United Kingdom run from the 6th of April until the 5th of April in the following year. In this time, you can put money into your ISA, up to the maximum limit, and allow it to grow with no real work on your part.
There are certain rules, such as age requirements, for each type of ISA, that you would need to meet prior to applying for one of these accounts. Here we will explore some of the different types of ISAs.
Many parents want to ensure that their children have as best a start in life as possible. This does not simply refer to their early years. Opening ethical junior ISAs at Wealthify allows you to put money away for your child in an account that they can own from the age of 16, and withdraw from when they reach 18. It is possible to transfer the junior ISA to and from different providers, which can help you to chase the best rates. This money can then grow, without being subjected to any taxes, meaning your child could have a decent lump of money to start them off in their adult life.
This ISA is meant as a form of long-term investment, either for buying your first home or even to put money away for when you at least 60 years old. The requirements for this account are that, on opening, you are between 18 and 40 years old. You may also be able to access your money, without having to pay any tax on the amount, if you are diagnosed with a terminal illness.
With a Lifetime ISA, you will receive bonuses from the government into your account each month. Currently, this figure stands at 25%, meaning if you put £100 into your account that month, you will end up with £125. If you choose to withdraw your money before you meet any of the above criteria, charges will apply.
A popular form of savings account is the standard Cash ISA. You may have one of these accounts per year, and need to be at least 16 years old to acquire one. Considering that interest rates vary depending on the provider, it can be beneficial to look at the rates set by each bank or building society before opening your account. You can then potentially close accounts and open them with different providers if you wish, or look into what transfer options are available to you should you later find a better rate elsewhere.
Saving money in an Individual Saving Account can be a good way of building up your money without being subjected to extra taxes. When you consider how long you wish to save for, you can choose the best ISA appropriate to you, and allow your money to grow.