If you’re considering an Easy Access Cash ISA but are unsure whether it is a good fit for you, we can help.
Read on to learn answers to questions around the intricacies of ISAs, including why you should consider opening one with us.
Before we get started, if you are unaware of what an ISA is, please read our blog: What is an ISA? ISA Accounts Explained
It’s all in the name. An Easy Access Cash ISA (individual savings account) allows easy access to your cash at any time – with the added bonus that the interest paid is not taxable – setting it apart from a standard easy access account.
So, you’ll benefit from the interest rate available, but also be able to withdraw your cash for emergencies, buying a new car, or other expensive purchases.
Other features include:
Easy access ISAs are normally on a variable rate. This means the rate is set by the provider at the start of the account and can change depending on multiple factors including the Bank of England base rate, and your balance.
A Fixed Rate ISA has a consistent interest rate for a set amount of time, e.g. one or two years, so you know exactly how much money you will make. However, to guarantee this rate, withdrawals are discouraged.
An ‘Easy Access’ and ‘Instant Access’ Cash ISA are the same thing. The terms are used interchangeably to refer to the ease of contributing to and withdrawing from these kinds of savings accounts. However, many providers prefer to use ‘easy’, rather than ‘instant’ as there may be a short transfer period.
At Aldermore, we offer flexible saving with Easy Access and Notice Cash ISAs.
A Notice Cash ISA can offer some ideal middle ground between an Easy Access ISA and a Fixed Rate ISA. It helps to protect your savings from the taxman, build a nest egg with interest, and you can add or withdraw whenever you like… but have a notice period (e.g. 30 days, other providers may have different notice periods) you’re required to give before withdrawing your money or a deduction of notice equivalent to the notice period may be taken.
A Notice Cash ISA could be suitable for you if you might need access to your money but won’t need it instantly. Therefore, it is ideal should you want to save for a considered, big purchase, but have a habit of impulse spending.
Generally, there are some misconceptions about who an ISA is suitable for. They aren’t just for financially stable older professionals. In fact, young people could benefit greatly from having an ISA.
An Easy Access Cash ISA is available to anyone with the minimum opening balance. However, whether this is the best type of ISA for you will depend on your personal situation.
For example, you may choose an Easy Access Cash ISA if you’re reluctant to lock away your money for a long period of time in case you need it. This could be for anything from paying for a wedding to buying a new car, or even a deposit on a house.
If you’re saving for your children’s future or retirement, then a fixed ISA may be more suitable due to longer terms and predictably higher interest rates.
Make sure to compare the types of ISAs available with your needs and circumstance before investing.
After reading about the different types of ISA, you can find out more about the accounts we have available on our website.