Pros And Cons Of Cash Isas
Posted on 02. Jan, 2012 by admin in Investments, Personal Finance
Cash isa is an “Individual Savings Account”. These usually pay a higher interest rate than a regular savings account. And, you don’t have to pay taxes on the money. This means that you will invest a certain sum on money and leave it grow on interest. The additional sum that forms is tax-free and therefore can be seen as net profit. There are restrictions on the sums that can be deposited to cash ISA.
Pros to using cash isas
- They are simple to open and keep track of.
- They are tax-free.
- You have easy access to your money.
- The value does not decrease.
- Anyone over the age of 16 can have one.
- Good for long term savings
- Low minimums
- You can have instant access.
- Some are fixed term
- Some offer guaranteed base rates
Cons to using cash isas
- Small return on investment.
- You do not make that much money.
- You have to tie up your cash.
- Transferring cash isas to another provider is hard.
Cash ISAs are simply savings accounts where the interest isn’t taxed. Just like normal savings accounts there’s a variety of cash ISAs available, such as instant access, fixed rate, and accounts with base rate guarantees.
Before choosing one, it is wise to check as many cash isas as possible.