ISAs explained.
Getting your ISAs in a twist? Watch our video to find out about the different types.
Common enquiries
Still unsure about something? We’ve collected some of the most frequently asked ISA questions and put them in one handy place.
An Individual Savings Account (ISA) lets you save and invest without paying income tax on the interest you earn or the increase in the value of your investment.
There are four types of ISAs for adults: cash ISAs, stocks and shares ISAs, lifetime ISAs, and innovative finance ISAs.
The Halifax offers two types of ISAs:
- Cash ISAs are savings accounts where interest paid is tax free. They
include the Help to Buy: ISA and Junior Cash ISA for children under
18. - Stocks and shares ISAs are a way to invest tax efficiently. They
include the investment ISA and self-select stocks and shares ISA.
You can save up to £20,000 in ISAs in the current tax year. This allowance can be used in one type of ISA or any combination of the four, as long as you don’t exceed the £20,000 annual allowance. This includes ISAs held outside the Halifax.
Bear in mind that the amount you can pay into your ISA may be limited by the type of ISA you have. For example, the maximum amount you can pay into a Help to Buy: ISA is £200 per month.
The tax year runs from 6th April one year to 5th April the next and you can't carry any unused amount over to a new tax year. The ISA allowance simply resets back to the annual allowance again on 6th April.
What’s the difference between cash ISAs and stocks and shares ISAs?
Cash ISAs
- A cash ISA is a savings account where you don’t pay tax on any interest you earn.
- You can choose whether to have easy access to your money or lock your money away to get a higher rate of interest.
- If you are a first time buyer, you can choose to save up to £200 a month in a Help to Buy: ISA and get a 25% government bonus on your final balance, up to £3000 (based on eligibility).
- Bear in mind; you can only save into one cash ISA in a tax year. This includes Help to Buy: ISAs and cash ISAs held outside the Halifax.
What are the risks?
- You may lose money if you close a fixed cash ISA before the end of its term.
Stocks and shares ISAs
- A stocks and shares ISA is a tax-efficient way to invest in a wide range of stocks, shares, funds, bonds and gilts.
- You can choose to invest in our three professionally managed funds with our Investment ISA, or choose from a wider range of investments with a Self-Select Stocks and Shares ISA.
- Bear in mind; you can only save into one stocks and shares ISA in a tax year. This includes investment ISAs and self-select stocks and shares ISAs.
What are the risks?
- Please remember that the value of an investment and the income from it can go down as well as up and you may get back less than you invested.
- You should leave your money in place for at least 5 years to help even out the markets' ups and downs.
If you want to learn more about the differences between savings and investments in general, then view our Investing or Saving page.
Tax treatment depends on your individual circumstances and may change.