Deposit Based Investment
There are various deposit-based investment vehicles available in the marketplace. Many customers will have money on deposit either with a bank or building society.
Every basic rate taxpayer in the UK now has a Personal Savings Allowance of £1,000. This means that the first £1,000 of savings interest earned in a year is tax-free. If you are a higher rate taxpayer (40%), then your allowance is £500, and 45% taxpayers have no savings allowance at all.
Commercial Banks & Building Societies
Commercial Banks and Building Societies offer a variety of savings accounts. Interest often varies in line with the general level of interest rates, though accounts which pay fixed interest over a specified period may also be available. Accounts with fixed interest may restrict access to the money on deposit, typically requiring notice before withdrawl, and charging penalties for early withdrawals.
With the introduction of the Personal Savings Allowance in April 2017, interest is now paid gross (before deductions for tax).
You can have one cash ISA up to the limit of £20,000 each tax year with one provider.
Any ISAs opened between 6 April and 30 June 2014 will automatically become a NISA, with a higher limit. From 1 July 2014, you are able to add further money up to the new £20,000 limit.
From Autumn 2015 individuals may be able to withdraw money from some (flexible) cash ISAs and replace it in the same year without it counting towards their annual ISA subscription limit for that year. Please check with your provider.
The cash ISA can consist of money on deposit enjoying a tax-free environment. The minimum age to own a cash only ISA is 16.
Cash Junior ISAs are now also available. Your child can have a Junior ISA if they:
- are under 18
- live in the UK
From 6 April 2015 it became possible for parents to transfer their children's Child Trust Fund (CTF) account into a Junior ISA (JISA). At age 18 a JISA will now automatically turn into an adult ISA.
National Savings & Investments
National Savings & investments are Government backed. You can visit the NS&I website here http://www.nsandi.com/
The Financial Conduct Authority does not regulate advice on deposits or National Savings & Investments products.