Last updated: 23/07/2020 | Estimated Reading Time: 3 minutes
The best ways to get more from your ISA
If you are looking to save your money away somewhere, cash ISAs are a great option to consider. They operate in a very similar way to standard savings account but have the benefit of being protected from tax. This means that you can keep all of the interest that you earn on any money that you have stored in these accounts.
This guide will explain everything that you need to know about how to make the most out of your cash ISA.
In This Guide:
- Deposit early in the tax year
- Start a standing order to your account
- Check for online ISAs
- Look out for introductory offers
- Check for better rates even if you already have an ISA
Deposit early in the tax year
One simple thing that you can do in order to maximise the efficiency of your ISAs savings is to deposit your money into it as early as possible in the tax year. Doing this means that your money will be able to gain interest for the longest possible amount of time. For example, if you were to deposit the maximum £15,240 cash into your ISA, you would be able to earn yourself around £381 of interest with a 2.5% AER account.
Start a standing order to your account
Another good idea could be to start a standing order for your cash to be transferred straight into your ISA as soon as you are paid. You should work out how much you think you can afford to take out of your pay cheque each month and arrange for it to be sent straight into your ISA. Doing this will enable you to make the most out of your ISA and also will give you a clearer idea on how much you can hope to save in the year.
Check for online ISAs
There are a growing number of ISAs being offered that can only be managed online. Most of the major banks or ISA providers will have an online account management feature but by choosing an ISA that is solely controlled online, you allow the bank to save money on overhead costs such as branch management and other expenses. These savings can then be passed on to you in the form of more competitive interest rates. Not all online accounts are better value for money so it is important that you check out what is available before you commit to any individual account. The best way to compare ISAs is to use an online price comparison tool, here at Money Expert we offer a free comparison service that allows you to compare numerous different ISAs at once. This allows you to make an informed decision on which account is best suited to you.
Look out for introductory offers
One thing that you definitely do before you decide upon an ISA is check whether or not the advertised rate of interest is just an introductory offer. There are a large number of ISAs that are out there at the moment which offer highly competitive interest rates when the account is first opened but then drop to a "standard" rate after a certain amount of time. You want to make sure that this new rate is going to be as good as ones you could have got elsewhere, unless you are okay with switching ISA.
Check for better rates even if you already have an ISA
One of the biggest things that people forget to do is continuously checking for other accounts, even if they already have one. If you have an ISA open already, you have nothing to lose from checking to see if there are any more competitive ones on offer. You should also make sure that you keep checking what rate you are getting on your account because interest rates change a lot and many have dropped in recent years.