Cash ISA’s - Making your money work harder
I’m a big fan of the term “make your money work harder”, and you will probably become accustomed to this as you continue to read my posts. I feel that money that isn’t earning as much as it can is the same as burning money. One example i will give you today is how to make your money work harder by using cash ISA’s.
A cash ISA is basically a tax free savings account which is shielded from the government’s ability to skim a bit of the top - they don’t take any tax. It’s basically their incentive or way of allowing you to make a little more on your savings each year, and means the savings are passed onto you. There is a limit to how much you can put in an ISA per year, so don’t delay and get your ISA set up immediately. Before April of this year, there is a limit of £3,600 which can be put into the ISA which cannot be increased. After this, the limit is reset for the following financial year – effectively capping your interest free saving ability for that year once it has been maxed out. Money can be withdrawn at any time, hence the slightly lower interest rates, but once you withdraw money you cannot re-deposit it if you have reached the £3,600 limit for that year.
How safe are cash ISA’s?
Very safe in fact. The UK government will guarantee up to £50,000 of your
Earn more from your savings with cash ISA's
hard earned money from any financial establishment which keep your peace of mind. Because of the economic climate, you have every right to worry about the safety of your finances, do not worry, the money is backed by the Financial Services Authority (FSA), and is capped at £50,000 per institution.
Please note that this protection isn’t applicable to shares and stocks as they have the element of risk, and as you are ‘risking’ your money, this protection does not apply.
How do i apply?
Most banks allow you to fill in forms at their branches, or you can apply at most online banking sites, who will then send you forms to fill out. Natwest currently offer 3.51% on their Cash ISA, and also allow online management of the account – however, if you search around for a while in Google, you can boost your AER significantly! Because this is a government backed scheme, your eligibility is checked and will take a few weeks to set up. Despite this, a cash ISA is a great way to boost your savings compared to the abysmal savings rates currently on offer in the UK!
