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Make the most of your ISA allowance

Jan 31, 2011

With the credit crunch continuing to prevail, many experts are advocating Cash ISA's as part of a financial fitness regime to help savers get through another tough year.

The average interest earned on ordinary savings accounts is on course to dip below 1% for the first time*, so utilising your ISA allowance could be a very worthwhile exercise in 2009.

What is an ISA allowance?

ISAs, or Individual Savings Accounts, were introduced almost ten years ago and their big advantage is that returns are tax-free. Consequently, the maximum amounts that can be paid into an ISA have always been strictly controlled.

Every tax year you are entitled to an ISA allowance which can be used from 6 April to 5 April. This current year you can save up to £3600 in a cash ISA and you won't have to pay a penny in tax on your interest. So, in a nutshell, ISAs save you tax and therefore increase thereturn on your savings. Crucially, unused allowances (or portions of them) don't rollover; they are lost for good.

Please note: individuals are able to subscribe to either a cash ISA, a stocks and shares ISA or both, subject to the overall limit of £7200 in a tax year.

The Cash ISA from Teachers

You can benefit from tax free savings by opening a Cash ISA with Teachers Building Society for just £250, or only £100 for teachers and others who work in education. Unlike investment products from many other organisations, savings earn interest from each complete day that your money is with us. On top of that, our Cash ISA is an easy access account, meaning withdrawals against cleared funds are free at any time and free of any interest charges.

To benefit from your ISA allowance in the current financial year, make sure you invest by 5th April.

Click here to download an application form.

More about ISAs from Teachers Building Society * Source: The Observer, Sunday 11th January 2009

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