Independent Savings Accounts Explained

You can never be too sure of what the future will provide you with. You may be financially stable at the moment but it is important to note that this will not always be the case. Life is very dynamic especially with the hard economic times most of the citizens across the world are experiencing today. This is why it is very important for you to be careful with how you spend your money. It is advisable that you device a plan to try and save up the little extra money that you have In order to secure your future. An independent savings account (ISA) is just what you need.

Unlike the standard savings account which was thought out as a product for the rich only, an ISA is meant for everyone regardless of their financial status. An independent Savings Account is a financial product which offers absolutely no restrictions on the amount of money you can withdraw at any time. Since the accounts are at liberty of taxes, there main objective is to provide you with a safe place for investing and saving up your money for future needs. The amounts you will be able to get inform of returns will depend on the ISA rates for the particular account.

Just like any other type of savings account, the ISA’s are of different types. You can go for the notice account, the fixed rate account or the easy access account depending on what you want and the ISA rates that are most comfortable for you. It is very possible to have more than one ISA accounts. However, they should be different. You could open cash ISA and a stocks and shares ISA at the same time. A cash ISA is just like the ordinary savings account with the exception of its tax free nature. Your annual allowance will be split into half and each half fed into the different ISA accounts. You could also opt for the option of investing your full allowance in the stocks and shares ISA.

Moreover, you could also decide to invest other non-cash properties which are inclusive of the investment trusts, unit trusts, bonds and individual shares among others. It is also very possible to transfer all the money you invested in the preceding tax periods without losing the tax dependent status. The ISA rate will vary depending on a tax payer’s status, whether you are a higher rate or a basic rate tax payer.

As much as the ISA idea and the ISA rates are very inviting, it is important that you always put in mind the fact that the funds saved in the accounts cannot be considered for security in case of a loan. In addition, it is advisable that you use up all your years allowance on the ISA since they cannot be carried down to the next year.