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Save today with a cash ISA

An ISA is an Individual Savings Account. You can save in a cash ISA or an Investment ISA or a combination of both to maximise the amount you can save tax free each year. The total amount you can save each tax year is £10,680. You cannot carry forward any unused allowance to the next tax year, but you will get a new allowance.

Cash ISAs are like ordinary savings accounts. However, the amount you can invest in your cash ISA is limited to £5,340 each tax year. You will need to use Investment ISAs to save up to the annual limit. You will earn interest on your cash ISA, and you do not have to pay income tax on it. Cash ISAs are either fixed-term accounts or instant access accounts. You can save by making regular payments into your individual savings account or make a lump sum deposit. If you are close to using you limit of your cash ISA, then you can transfer the money you have saved into an Investment ISA.

You can open a cash ISA account from age 16, so they are good ways to save if you are at college or beginning your career without paying tax on your interest.

Each tax year you can only have a single cash ISA. If you open another ISA in a future tax year, you cannot go back and top up one you already have. When you withdraw your money, you will be unable to add more to your individual savings account that year.

Finding a cash ISA is easy. You can use any of the comparison web sites available to check what is currently on offer. You are looking for the best interest rate available, before checking that the ISA meets your investment requirements. Once you have made your choice, you can open an account, and begin investing.

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