ISA stands for Individual savings Account and they were set up by the government as a way to save money tax free. They used to be attractive to savers who paid tax as they would give them a tax break on the interest that they got. This meant that tax payers would use it instead of a conventional savings account so that they could get a better return on their savings. However, they are not so popular now for a number of reasons.
The government have now changed the rules on tax on savings from interest. If you are in the basic rate tax band you can receive up to £1,000 in savings interest before being taxed on it. If you are in the higher rate band you will not be taxed on the first £500 and if you are on the additional rate tax band then you will have to pay tax on it. This applies to savings in banks and building societies, credit unions, unit trusts, investment trusts, open ended investments, peer to peer lending, government and
It is worth comparing interest rates as well. If you look at how high the interest rate is on an ISA compared with a savings account, then you will be able to see whether it is worth getting an ISA or not. You will probably find that there are many different rates with different companies. You may want to use a comparison website to help you find what is available more quickly. There are many out there and you may also find websites which will let you know who has the best rates which could be useful. It is