The ABCs of ISAs
Understanding ISAs
Saving money is essential for financial security and growth. Individual Savings Accounts (ISAs) offer a tax-efficient way to save and invest. Whether you're considering a simple cash savings account or looking to explore more diverse options, our guide will help you navigate the essentials.
The benefits of ISAs and how they differ from other savings accounts
Individual Savings Account (ISA) allows you to save money without paying tax on the interest you earn. This is the key difference between an ISA and other types of savings’ accounts. Here’s how it works:
- Tax Efficiency: You don't pay tax on any interest earned within an ISA.
- Personal Savings Allowance: Interest from ISAs doesn't count towards your Personal Savings Allowance limit; hence it remains untaxed.
More details about the Personal Savings Allowance.
Types of individual savings accounts
For adults aged 18 and over, the main types of ISAs include:
- Cash ISA
- Stocks and Shares ISA
- Innovative Finance ISA
- Lifetime ISA (LISA)
For those under 18, there are Junior ISAs:
- Junior Cash ISA
- Junior Stocks and Shares ISA
At Danske Bank, we offer both adult and junior cash ISAs. Learn more about Junior ISAs.
“Make your money grow with Danske Bank's easy to use, tax-free savings account.”
Who can open an adult ISA?
- Age and Residency: Available to individuals who are existing customers aged 18 or over who are UK residents for tax purposes.
- Bank Requirements: Non-customers can open a Danske Cash ISA only if they are resident in Northern Ireland.
How much can you save in an ISA?
Each tax year, the UK government sets a limit on how much you can save into ISAs, known as your ISA allowance. You can find the current tax year allowance on our Cash ISA page.
A payment to an ISA is often called a subscription. Key points on making ISA subscriptions include:
- You don't need to use your full allowance, but any unused allowance does not roll over to the next year.
- You can spread your allowance across various ISAs and providers, but the total contribution must not exceed the annual limit.
- From April 2024, you can subscribe to multiple cash ISAs within the same tax year (though only one of these can be with Danske Bank).
- You can transfer existing ISA savings between ISA providers without impacting your annual allowance.
- You must remain UK resident to keep subscribing to your ISA. ISA rules allow you to keep your existing tax-free ISA savings; you just can’t add to them while not resident. (Your ISA Provider may have additional rules about customer residency so you should let them know if your residency status changes.)
Navigating Danske Bank's Cash ISA
Understanding ISAs doesn't have to be complex. With the right information and options, you can make a savvy choice to enhance your savings efficiently. At Danske Bank, we are here to help you navigate your savings journey with ease.
Danske Bank’s Danske Cash ISA is an instant access account, meaning you can withdraw funds anytime, offering convenience along with the benefit of tax-free interest.
Explore more about how Danske Cash ISA can work for you and your financial goals:
Danske Cash ISA
