Savings accounts explained

ISA stands for Individual Savings Account. The main difference between a cash ISA and any other savings account is that it offers tax-free interest payments, so you could get more for your money. Also, you can only have one ‘active’ cash ISA every year – this means that you can’t open multiple ISAs in a single tax year, and benefit from the tax-free savings allowance in every one of these.

The Personal Savings Allowance (PSA) means that, depending on the income tax rate you pay, you could earn up to £1,000 in interest in a (non-ISA) account during a tax year without having to pay tax on your interest.

ISA flexibility allows you to take out money from your ISA account and replace that money within the same tax year without it counting towards to your annual ISA allowance.

You can pay in and take out money whenever you need.

Often offering a better interest rate than an instant-access account. The difference is that you’ll be limited to a certain number of withdrawals in each account year to keep that interest rate.
If you go over the limit, your interest rate will drop to a lower level for the rest of the account year.

A way to save a lump sum for a fixed amount of time. Your interest rate is fixed, so it won’t go up or down. During the fixed term, it’s not possible to take out money without paying an early-access charge.