ISAs are a fantastic start to saving money. You can save up to £7,000 per year tax free. This article guides you through the different types of ISA and how to find an ISA to suit you.

Cash Mini ISAs

These are similar to savings accounts however the interest that is accrued is tax free. Anyone over the age of 16 can open a cash mini ISA and you can save up to £3,000 per year into one. Don’t just go with an ISA at your current bank – shop around for the best rates. Also consider whether you want instant access or not. Rates may be better on ISAs which are not instant access.

Share ISAs

These ISA are accounts which can hold shares. The money grows free of income tax and capital gains. Higher rate tax payers will avoid paying extra tax on their dividend payments from the shares and ISA profits do not need to be declared on tax returns. You can also have corporate bonds in a share ISA. These pay a fixed rate of interest and the company will pay the money back on a pre-agreed date. Again, this interest will be tax-free.

There are two kinds of share ISA – maxi and mini. If you are over 18, you can either put £7,000 into a maxi ISA or £4,000 into a mini ISA each year. You can hold open one maxi ISA, or one cash and one mini ISA per year. Bear in mind that shares can go up as well as down, so you may lose money. Generally, you should only take out a share ISA if you are planning to leave the money in for over 3 years.

ISAs can hold collective investment funds and this is a great way for private investors to dabble in the stock market.

Self-select ISAs

These ISAs are used to shelter individual shares, however stockbrokers usually will charge a fee for the wrapper. Unless you are going to face a large capital gains bill, these ISAs will probably not be beneficial to you.

Click here to see a list of the latest ISA accounts.

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