What You Need to Know about ISA

ISA, or Individual Savings Accounts, are “small” accounts that are tax-free. The accounts have a limit of £7000 per tax year (April is the start of a tax year) per person, and the ISA interest rate will depend upon the institution offering it.

There are two types of ISA: the mini ISA and the maxi ISA, which are further divided into two categories, the cash ISA, and the shares and stocks ISA. An individual can invest more money in shares and stocks (double the amount of cash ISA), because the money will go towards infusing the economy with fresh funds. Stock and shares ISA can have better ISA interest rates, which is what makes these attractive to some investors, but not to others because these do carry a certain amount of risk.

ISA interest rates are also not the only things that an investor needs to consider before putting money in an ISA account. One should also consider the financial stability of the institution that is offering it. While all institutions (banks, retail companies, investment, financial advisors and the National Savings and Investment) should be certified by the FSA and HMRC, these do not mean that they are all equal.