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