An ISA (or Individual Savings Account) is a tax-free savings account. If talking about ISAs feels a little confusing, don’t worry - we’re here to help clear things up.
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Cash ISAs are available to individuals aged 18 or over who are resident in the UK for tax purposes.
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What's an ISA?
An ISA is a savings account that lets you save or invest without having to pay tax on the interest, income or capital gains that you earn.
How much can you put into an ISA each year?
Each tax year, you have an ISA allowance of £20,000 (£4,000 of which can be used for a Lifetime ISA). The allowance for Junior ISAs is £9,000. Your ISA allowance is the amount of money you can save or invest without paying tax on the interest or capital gains you earn.
The tax year is from 6 April to 5 April. Your allowance refreshes every tax year. Just remember to check the ISA allowance limits every tax year, as they can change.
Personal Savings Allowance and ISAs
Your Personal Savings Allowance is separate to the annual ISA allowance. You might also get up to £1,000 of savings interest and not have to pay tax on it, depending on which Income Tax band you’re in. This is your Personal Savings Allowance and is in addition to the ISA allowance.
How many ISAs can I have?
You can have as many ISAs as you want, at the same time. But don't forget that your ISA allowance applies across all your ISAs combined. For example, if you have a Cash ISA and Stocks and Shares ISA, your allowance would be shared across both.
Can you move money in and out of a Cash ISA?
The simple answer is - yes! Easy Access Cash ISAs allow you to make unlimited withdrawals. There are usually withdrawal restrictions with Fixed Rate Cash ISAs, and withdrawals can lead to an interest charge, meaning you may end up with less money than you put in.
With Limited Access ISAs, you can usually make a set number of withdrawals a year. There might be interest charges if you make any more withdrawals.
Is a Cash ISA for you?
Whether getting a Cash ISA is right for you or not totally depends on your situation and long-term savings goals. Cash ISAs are structured like standard savings accounts; they can offer easy access, limited access or fixed interest rates for set terms. Some are also flexible by letting you replace the withdrawn funds within the same tax year and not lose your allowance.
How to choose the right ISA
There's a few things to think about to get an idea of which ISA might be right for you.
Access
Consider how often you'll need to access your money. If you can lock money away for a period of time, a Fixed Rate Cash ISA might work for you. Or, if you know you'll need access, an Easy Access option might be better.
Duration
With most ISAs, you can take them out for different lengths of time. If you decide how long you want to save for, you can find the right ISA to suit your needs.
Risk
If you're willing to take a risk with your money, you could consider a Stocks and Shares ISA. You'll need to invest for about 5 years and not need access to your money. Your investments might go down or up, and you might get back less than you put in. Over the long term, it has a greater growth potential than a Cash ISA.
ISA guides and tools
ISA frequently asked questions
Every type of ISA, (apart from Innovative Finance ISAs), is protected by the Financial Services Compensation Scheme (FSCS) which covers a maximum of £85,000 per building society, bank, or credit union.
To open an ISA, you need to be:
- A UK resident – or crown employee (or their partner) if you don't live in the UK
- 18 or older for a Cash ISA, Stocks and Shares ISA or Innovative Finance ISA
- 18-39 for a Lifetime ISA
- A parent or guardian to someone under 16 for a Children's/Junior ISA
You can transfer your ISA to another provider if they accept transfers in. To do this, you need to open your new ISA and fill in an ISA transfer form. The rest of the process is arranged between your current ISA provider and your new one.
If you want to transfer money you've put into your Cash ISA that year with Leeds Building Society, you must transfer all of it. This is because you can only pay into - or "subscribe to" - one ISA per tax year with Leeds Building Society. By moving all the money you've paid into your ISA that year, you move your whole subscription.
You will usually have a few options when your ISA matures, depending on your provider and your specific savings product. Standard options are moving the funds in your ISA to:
- A different, non-ISA account with the same provider or new provider. Your money will normally lose its tax-free[1] status if you do this.
- Another ISA with the same provider or different provider. This is known as an ISA transfer.
These different options won’t always be available, as this depends on your provider.
Learn more about ISAs
ISAs vs bonds explained
15 January 2025
How does a Cash ISA work?
14 October 2024
ISA interest explained
8 May 2024
The important things to know
[1]Tax-free means that interest payable is exempt from income tax. The tax treatment depends on the individual circumstances of each customer and may be subject to change in the future.
This article is intended as a summary only. Please don’t use this guide as advice, you’ll need to make your own decisions. If you have any further questions, we recommend seeking legal and/or financial advice.
Cash ISAs are available to individuals aged 18 or over who are residents in the UK for tax purposes.