The current ISA limits for cash ISAs are:
- £5,100 for those aged 50 and over
- £3,600 for those under 50.
From 6 April 2010 the annual investment will be £5,100 for everyone.
Cash ISAs generally pay a higher interest rate than normal savings accounts, and the interest earned is free of income tax.
You can invest in two separate ISAs in any one tax year: a cash ISA and an investment ISA. This can be with the same or different providers.
Transferring an ISA
You can transfer money saved in a cash ISA to:
- another cash ISA (if the new provider agrees to the transfer); or
- an investment ISA.
Not all providers accept transfers. If they do, you will need to ask the new ISA provider to arrange the transfer. ISAs must always be transferred – you can’t close the old one and start a new one, otherwise you will lose the tax advantage.
You cannot transfer money from an investment ISA to a cash ISA.
Consider switching an existing cash ISA if you feel the rate is not competitive. But if you have a fixed-rate cash ISA, check whether you will pay a penalty when transferring.
Shop around and look for a good home for your ISA account.