There is a lot of information we can get from the ISA guide and these information are very helpful in making people understand what ISA is and the benefits it offers. This guide is written in a very comprehensible manner so that anyone who read it is able to understand the necessities of ISA.

 

What Is ISA According To The ISA Guide?

ISA is Individual Savings Account. It is a financial product open to residents in the UK. Its main purpose is for savings and investment with minimum tax which is why anyone can avail of it. This program was launched on April 6, 1999. It was established to take the place of the PEP and TESSA which only catered to people who are in the middle class.

 

What Are The Benefits Of ISA According To The ISA Guide?

  • When cash is held or is withdrawn, it is no longer subjected to different kinds of tax such as capital gain tax or income tax.
  • Once you decide to withdraw your money, you can choose any amount. There are no restrictions or limits which mean you may get the amount you desire.
  • The amount of cash and investments you can have comes in a broad range.
  • This type of investment and savings account is a good complement for your retirement income pension.

 

How Many Types Of Investments Are There?

The Individual Savings Account come in three different investments and they are; Cash ISA, Stocks and shares ISA and Junior ISA.

 

What Are These Investments?

  • Cash ISA

The Cash ISA is your typical savings account where you deposit cash to your account. The only difference is, this account is free of tax.

  • Stocks and shares ISA

For this type of account, your money will be used for qualifying investments which are:

1. Cash awaiting investment – this type of investment does not require a time limit for holding money. The length of time may be based on the managers discretion.

2. UCITS or Undertakings for Collective Investment in Transferable Securities Directives

3. Different and possible conditions that can be satisfied by investment trusts

4. Company shares that are on the stock market which are in the list of stock exchanges that are recognized.

5. Public debt

6. Non UCITS investments

7. CDIs (CREST Depository Interests) or ADR’s (American Depository Receipts)

  • Junior ISA

ISA GuideJunior ISA was opened on November 1, 2011. The initial amount needed to open this account is £3,600. Children with this account are viable to cash or stocks and shares. Money that are deposited or invested in this account can only be withdrawn based on the following reasons.

1. When the account turns eighteen years old, the money deposited or invested can be withdrawn.

2. It can be withdrawn when the account holder acquires a terminal illness and a claim is agreed upon.

3. The account can be withdrawn after the death of the account holder as long as he is under eighteen.

A child who is sixteen years old may open his own account and once he turns eighteen, his account will be changed to an adult account. According to the ISA guide, children who are younger than sixteen may open an account as well but with the supervision of a parent.