Tax Efficient Saving Account - Cash ISA

In an unsure economic climate, financial planning is more necessary than ever and for anyone. With a family, saving in the long run has become a high priority. Giving yourselves and your family a strong financial base ensures they have the quality potential to start in life, whether they want to pay for driving lessons, begin on a course of higher education or choose another path.

For this ISA is the best choice as they give a good return on your money and is tax free. But there comes a need to understand the different aspects of ISA if you are planning to invest the most of your money in it. There is a limit to the amount you can deposit into your ISA in a single tax year. It will affect your choice which one to opt to.

In 2016/17 tax year you can invest up to £15,240 into the ISA products. You can entirely invest whether in cash ISA, stock and share ISA. You can also invest £5,000 in cash ISA, £5,000 in a stock & shares ISA, £5,240 in an innovative finance ISA.

Who is eligible?

1. It must be UK residence for tax purposes
2. Age 16 or over

ISA can only be held in a single name and you can only open one Cash ISA per year. You can withdraw the money from cash ISA and transfer whenever you want, but there is a special process to follow. Cash ISA might best suit you if you are merely searching for a low-risk savings choice with easy accessibility to your money.

For more information on Cash ISAs and other types of savings accounts, speak to a savings adviser who could help you make informed decisions to suit your financial needs. You may find it beneficial to talk to the experts at Barrington Howe Ltd. Contact Us!

What exactly are Individual Saving Account and its importance?

There are different options available that will affect how you save and how much access you have for your money. The most essential establishment for any financial arrangement for any individual on the planet is an investment account. Often many were neglected these accounts without knowing the advantages. But still these accounts are most desirable by anyone.

Saving account mainly focus on providing an opportunity for the account holders, in which they aside one portion of liquid assets like a fraction of the savings into the account which will prove handy at the time of emergencies and retirement.

It is opened by an individual and is continued by the credit unions, banks, and as well as other financial institute. The money which is deposited in the account gives interest in return. But you must do the saving in the individual saving account to earn a tax free interest every year. As the due date comes near, the banks or other building institute attracts the investors by trying to offer higher paying individual saving account.

These saving account can be used as cash save or invest in stocks and shares but they have its own cons as well pros. In cash ISA, the interest rate is changed according to the account name like for junior ISA is 3%, for easy ISA the interest rate is 0.10% on balances from £1 or 0.50% on balance of £40,000. In stock and share ISA, due to tax and fee advantages, there is limit to invest each year. In 2016/17 tax year the maximum you can invest in an ISA is £15,240. The ISA allowance for 2016/17 tax year is £15,240 in cash, stock &shares and £4,080 for Junior ISAs.

As a rule, avoid withdrawing money from your cash ISA if you are about to transfer accounts. If you do, you'll lose all your tax benefit.

Also learn: Concept of TaxPlanning