If you’ve opened a paper or read the news online recently, you’ve probably come across a term known as “ISA season” and how you should use your ISA allowance before the end of the tax year. So, what does it actually mean and why should you be taking advantage of it?
In a nutshell, with normal savings accounts, any interest you make is taxed, so say for example you deposit £10,000 in a 12-month fixed term deposit account paying 1.93% interest. At maturity, you’ll make £193 in interest which will be taxed up to 45% depending on the tax bracket you belong to. With an ISA however, where you can, at the moment, you can save up to a maximum of £20,000 a year and any interest you make on that £20,000 will be tax-free.
At OakNorth, we offer a range of savings products for individuals: fixed term deposit accounts ranging from six months to five years, easy access and notice accounts, as well as easy access and fixed rate cash ISAs. Since our launch in September 2015, we have attracted over 40,000 deposit customers, enabling them to make their money go further.
Our current ISA range gives savers a choice between two types of ISA products – a Personal Easy Access Cash ISA and a 12 Month Fixed Rate Cash ISA, both require a minimum deposit of £1,000 to open an account and a maximum balance of £250,000. However, we’re about to strengthen our offering further with the launch of a 24 Month Fixed Rate Cash ISA and a 36 Month Fixed Rate Cash ISA.
Some things to be mindful of:
Making sure the product is a right fit for your needs: there are several different types of ISA products available in the market – cash ISAs which we offer, stocks and shares ISAs, Help-to-Buy ISAs, Innovative Finance ISAs, Junior ISAs, and Lifetime ISAs. Doing your research will enable you to find the product that’s a best fit for your needs and most well-aligned with your savings goals.