Nowadays there are so many different types of accounts and ISAs that you can use to save money – the problem is choosing which is best for you. Different ISAs suit different situations and needs, so it is important to choose the kind that is right for you.

Here we will break down some of the key types of ISAs that are out there and why they might be good for you.

Stocks and Shares ISAs

The terms “stock and shares ISA” may be a new one on you but is fast becoming one of the go-to ISAs for the modern saver. A stocks and shares ISA enables you to save up to £20,000 per year and earn a little extra via automated investments.

You can start a stocks and shares ISA from as little as £1 but can top this up as you go. You can also withdraw the funds whenever you like at no penalty to you. The good news is you don’t need any prior knowledge or experience of stocks and shares to do this, as there are services out there that will do it all for you for a small monthly fee.

Help To Buy ISAs

Designed to help first-time buyers get themselves onto the property ladder, Help To Buy ISAs are a great way to make saving for your first house deposit quicker. These ISAs allow you to save £1,200 in the first month and £200 each month after, and when you do come to putting down your deposit, the government will add an extra 25% on top of what you’ve saved.

The other great thing about these ISAs is that if you are a part of a couple then you aren’t just limited to one – you can have one each. This means that if you both save the maximum over the course of a year, your £6,800 becomes £8,500. The caveat is though that in order to get the extra 25%, it must be spent on buying a property and nothing else.

Easy access ISAs

If you think that you will need access to your savings at a moment’s notice, then an easy-access ISA is probably best for you. The difference between these ISAs and others is that there are not withdrawal restrictions, and you can take your cash as and when you want it.

With an easy-access ISA, you are likely to get a lower rate of interest, so the amount of money that is there will not build up as quickly as it would with a standard ISA.

Fixed-rate cash ISAs

A fixed-rate ISA is the most commonly-used kind of ISA and allows you the opportunity to earn interest on your savings. You can save up to £20,000 per year with an ISA and earn tax-free interest whilst doing so.

With a fixed-rate ISA, you will usually need to wait until your term ends to withdraw what you have saved, otherwise there is likely to be interest penalties – if you think you will need access sooner, go for an easy access ISA.

Vicky Charles

Vicky is a single mother, writer and card reader.


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