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Tax-free savings in an ISA could mean you hit your savings targets sooner than you thought
There are four types of ISA - cash ISAs (which have a fixed or a variable interest rate), stocks and shares ISAs, innovative finance ISAs and Lifetime ISAs.
Cash ISA - Cash ISAs are available as variable rate accounts or fixed rate accounts. The interest rate on a variable rate cash ISA can go up and down over time whilst fixed rate cash ISA interest rates are guaranteed not to change for a fixed period.
Stocks and Shares ISA - With a stocks and shares ISA you won’t pay zhptddz.com Income Tax or Capital Gains Tax on any gains you may make. But it’s important to remember you may also not get all your money back, as you’ll be investing in stocks and shares and the value of these can go up or down.
Lifetime ISA - The Lifetime ISA is a tax-free savings or investment account to help 18 to 39 year olds buy their first 币圈快讯home or save for retirement. Save up to £4,000 each year, and receive a government bonus of 25% - that’s a bonus of up to £1,000 a year. Conditions apply when withdrawing funds from a lifetime ISA.
Which type of ISA is right for me?
To work out which savings are best for you means looking at your own personal circumstance and the reasons you’re saving.
You’ll want to work out:
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When you need access to your money - some ISAs offer instant access while others may have limits on when and how often you can withdraw your money.
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How you manage your savings account - you may want the convenience that online access offers or the clarity of talking to people face-to-face or on the phone.
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With a stocks and shares ISA, there are risks that you could get back less than you’ve put in, so you might want to assess whether your savings are suitable for this kind of saving.
The tax advantages of ISAs depend on your individual circumstances and the tax treatment of ISAs may change in the future.
Tax-free means the interest paid will be free from zhptddz.com Income Tax and Capital Gains Tax.
AER stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year. As every advertisement for a savings product which quotes an interest rate will contain an AER, it enables a customer to compare different products on a standarised basis, and the return they can expect from a savings account over time.