Earn 6% interest tax free on £1+ with instant access (Why an ISA?)

Member Name: Sandra-M

Product:	Why an ISA?
Date:	28/07/01 (167 review reads)
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Advantages: You can open a Cash Mini ISA with a little as £1, Interest is tax free, Interest rates are higher than for an average building society savings account

Disadvantages: Can only invest £3000 this tax year in a Mini Cash ISA

By checking the many financial websites around you will find a range of Cash Mini ISAs offering you rates of around 6% tax free by investing as little as £1. For example, go to the Savings and Investment section of www.moneyworld.co.uk and then to the ISA section. You will be taken through a series of questions such as much you have to invest, how much notice you are able to give before accessing your funds. You will then be given a range of Cash Mini ISAs.

At the moment Smile are offering 6% gross interest on £1 with instant access to your funds. Smile are an internet bank so the account will be opened and accessed entirely online. I have a Cash ISA and Savings account with Smile and have found the application proces very easy and efficient. Money is withdrawn online by transferring it to a nominated bank/building society account.

If you do not want an internet based ISA, then you may wish to opt for a telephone operated or branch-based ISA. The rates for these types of accounts tend to be lower. Again the site will let you select this as an option.

The maximum you can invest this tax year is £3000. You have access to your funds (depending on the notice period) but once your money is taken out you cannot reinvest.
Therefore, if you invest £3000 and take out £2000 you cannot reinvest another £1000 as the limit this year is £3000. However, you can add to the ISA next tax year.

With the volatility of stock markets at the moment a mini cash ISA is a safe haven for those with funds to invest who want to earn more than with a building society current account.

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