Head in a spin? Your ISA questions answered

We’ve put together all the answers you might need to your most searched-for ISA queries.

What’s an ISA and how does it work?

A key benefit of an Individual Savings Account (ISA) is that you don’t have to pay tax on the interest earned.

Another bonus is that interest from an ISA doesn’t count towards your Personal Savings Allowance, which is the amount of interest you can earn before you need to start paying tax on your savings.

We offer Cash ISAs, with the option to choose from:

• Fixed Rate Cash ISA – earn a fixed interest rate for a fixed period of time
• Easy Access Cash ISA – earn a variable interest rate. Plus you can make withdrawals at any time

We also have a Cash ISA platform called the Mix & Match ISA which allows you to have more than one Cash ISA with us in the same tax year.

You don’t have to put all your annual allowance into one ISA product at the same time. For example, you could open an Easy Access Cash ISA with £5,000 and then the following month deposit £10,000 in a 1-Year Fixed Rate Cash ISA .

If you have more money available, you could open a third Cash ISA product with us using the remaining £5,000 of your annual allowance. Provided you have not subscribed with any other provider for the current tax year.

The types of Cash ISAs you can open will depend on the products we have available at the time, but no matter how many you hold with us, they’ll all be held within one ISA wrapper.

What’s the maximum annual contribution limit for an ISA?

The Government sets a maximum allowance that can be saved in an ISA each tax year, which you can check on the HMRC website. The current ISA allowance is up to £20,000, per year. The government is currently considering making changes to the annual allowance, which may come into force later this year.

This annual allowance can be split across a Cash ISA, Stocks and Shares ISA, Innovative Finance ISA and Lifetime ISA.

Is an ISA better than a savings account?

When choosing an account, it’s a good idea to consider your goals and individual financial circumstances.

Compared to other savings accounts, ISAs give you the benefit of tax-free savings so you could make more out of your money.

With a Fixed Rate ISA, you will have more limited access to your savings in contrast to a standard savings account, so it’s worth weighing up whether you’d need more frequent access to your money.

Our Easy Access Cash ISAs could help if you:

• have an ISA you wish to transfer to us
• want to take advantage of your full ISA allowance
• need access to your savings quickly, when you need them
• want a Cash ISA you can open and manage online
• don’t require a flexible ISA, and understand you can’t take money out of your Cash ISA and replace it in the same tax year, without it counting towards your annual ISA allowance 

Our Fixed Rate Cash ISAs could help if you:

• have an ISA you wish to transfer to us
• want to take advantage of your full ISA allowance
• want to set the interest rate your savings earn for a fixed period of time
• want a Cash ISA you can open and manage online
• don’t require access to your money for the term of the Fixed Rate Cash ISA

Should I get a 1-Year or a 2-Year Fixed Rate ISA?

A Fixed Rate Cash ISA generally offers a higher rate of interest for money that you can afford to put away for a year or more.

Generally, you’ll get a higher interest rate if your put your money away for a shorter period of time. This will mean you can access your money a little sooner but you will then have to shop around for another account at the end of that term at which point interest rates may have reduced.

For longer term Fixed Rate ISAs, you may get a slightly lower rate of interest, but you’re guaranteed that rate for a longer time, regardless if rates move up or down. But you’ll be unable to access your money during the term of the account.

Fixed Rate Cash ISAs are limited edition accounts which may be withdrawn from sale at any time without notice - if you see one you like, don't take too long to apply!

Can I have two ISAs?

Under HMRC regulations, you’re permitted to subscribe with multiple Cash ISA providers within the same tax year, 6 April to 5 April. However, this is only where a provider allows this.

Currently you’re unable to subscribe with us if you’ve already subscribed with another provider, unless you are transferring all current year funds to us.

You can hold more than one Cash ISA product within our Mix & Match ISA to suit your needs, for example, you can have one Fixed Rate Cash ISA and one Easy Access Cash ISA.

Have you paid new funds into a Cash ISA this tax year? Don’t want to transfer them? While you can’t pay new funds to an ISA with us in the same tax year, you can still transfer funds from ISAs with another ISA provider from previous tax years.

Please note: The tax treatment of ISAs may change in the future and is based on your individual circumstances.

Can I transfer my existing ISAs from another provider?

Yes, you can transfer all of this year’s subscriptions and those from previous years when you open a new Cash ISA with us.

You can transfer from one Cash ISA to another one with a new provider. And you can transfer money from an existing Stocks and Shares ISA into a Cash ISA.

You should always make sure to transfer your ISA through an ISA transfer request with your bank or building society, or any withdrawals will no longer be held in your Cash ISA. This means that any tax benefits in respect of the amount withdrawn will be lost, and the money withdrawn can’t be repaid into a Cash ISA later without impacting your annual ISA allowance for that tax year.

If you want to transfer your Cash ISA for the current tax year you must do so in full. If you’ve already subscribed to an ISA with another ISA provider in this tax year, you shouldn’t make a deposit into an ISA with us for this tax year until the ISA has been transferred in full.

Before you request the transfer, check the terms and conditions of the ISA you’re transferring from as there may be restrictions or charges that apply.

If you’d like to find out more, take a look at our award-winning range of Cash ISAs or visit our ISA hub.