A reader from London is looking for an ISA where she can get access to her funds quickly.
Andy McKechnie, head of sales and marketing for savings at Halifax, tackles the problem.
Julia from London asks:
I am looking for an ISA which allows me easy and penalty-free access to my savings.
Are there any on the market?
Yes, most ISA providers offer Cash ISAs with instant access. These often offer variable rates of interest and also tend to offer higher rates if you’re happy to only use direct access – such as telephone or online only ISAs.
It is important to remember that currently you can only invest up to £3,600 per tax year into a Cash ISA therefore any money that you take out reduces the balance you can achieve at the end of the tax year. For example: If you open an easy access ISA during the 2009/10 tax year with £2,000 and then make a withdrawal of £500, you can only invest a further £1,600 on or before 5 April 2010.
This is because your actual deposits must total no more than £3,600 between 6 April 2009 and 5 April 2010. For this reason is it often best not to regard any Cash ISA as an account to ‘dip into’ on a regular basis.
Have a look what’s around in the marketplace and find an account that suits your needs best in terms of access and number of deposits you’re looking to make.
From 6 October 2009, the ISA subscription limit (currently £7,200) will increase to £10,200 for anyone eligible to invest in an ISA who was born on or before 5 April 1960 (i.e. who will be aged 50 or over during the current tax year). Up to £5,100 of the new ISA allowance can be saved in a cash ISA with one provider.
The remainder of the £10,200 can be invested in a stocks and shares ISA with either the same or another provider. Alternatively, the full £10,200 can be invested in a stocks and shares ISA with one provider. These higher limits will apply to all eligible ISA investors with effect from 6 April 2010
If you have a question for Andy, go to the myfinances.co.uk Ask the Savings Expert section.
Or for more information on your savings options go to savings at Halifax.
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