Cash The Checks

A Cash ISA is an excellent idea for any UK based saver as it means saving a set amount and keeping that amount tax free. The amount of money that can be saved in a cash ISA changes annually, but it is currently £3,600 that is able to be saved tax free if you are aged under 50, or £5,100 if you are older – But from April 2010 this is changing to allow everyone save £5,100.

When the term ‘cash ISA’ is discussed generally people ask how they differ from regular savings accounts. The main difference is that a cash ISA does not charge 20% interest each year like most savings accounts do. Cash ISAs permit the account holder to keep all of the interest earned which means it is extremely unlikely that a cash ISA will give you less interest than standard savings account – even if the gross interest rate is lower.

One common misunderstanding when it comes to ISA’s is that the money needs to be held for a certain period of time before the account holder will benefit from any tax free savings. This isn’t necessarily true though – Certain ISAs allow you to withdraw money and not lose tax benefits on the remaining sum in the account.

It is worth shopping around before deciding to open a Cash ISA., Cash ISAs can make a dramatic difference to the amount you save, so choosing the right one for you is important. Compare cash ISAs at moneysupermarket.com to get all the latest deals.

- Edwin, CashTheChecks.com