The cash Isa used to be simple — an easy-access or fixed-rate account with tax-free interest.
But then politicians muddied the waters by introducing variations of the account. Now savers have to look at seven types to find the best deal for them.
Follow our guide to find the right account for you…
The cash Isa used to be simple — an easy-access or fixed-rate account with tax-free interest. But then politicians muddied the waters by introducing variations of the account
This classic Isa puts a tax-free wrapper around your nest egg. You can put in between £1 and £20,000 as long as you are a UK resident aged at least 16.
BEST FOR: Everyone except those saving for their first home.
An easy-access basic cash Isa with a twist. You can take out money and replace it in the same tax year without it counting towards your annual allowance, but not all providers offer this.
BEST FOR: Those who want to save most or all of their £20,000 allowance but who may need access to the cash.
This lets you split your £20,000 cash Isa allowance between a fixed-rate and easy-access account.
With most providers, this breaks the cash Isa rule that says you can open only one per tax year.
With providers including Nationwide, Newcastle BS and Ford Money, the fixed-rate and easy-access money sit side by side in the same Isa wrapper.
BEST FOR: Savers who want some allowance as ready money but are happy to tie some up.
Parents and grandparents can save up to £4,128 (rising to £4,260 in the new tax year, which starts on Friday) for children.
The money is tied up until the child reaches 18, when they can spend it or transfer it to an adult Isa. You can transfer your old Child Trust Fund to this type of account for better rates.
BEST FOR: Children under 18 — if their parents prefer cash to the stock market.
This is essentially an extra Isa allowance on top of the usual £20,000, equal to the value of your partner’s Isa at the date of their death.
You have three years after their death to open this, or 180 days after the administration of the estate is complete, if this is later.
You must have lost your spouse or partner on or after December 3, 2014, to apply.
BEST FOR: Anyone whose spouse had an Isa when they died.
Help to buy
This is to help first-time buyers get on the property ladder by saving up to £200 a month.
You get a tax-free 25 per cent government bonus towards a home costing up to £450,000 in London, or £250,000 elsewhere.
Save £1,600 for the minimum £400 bonus. The maximum bonus is £3,000 on £12,000 savings.
BEST FOR: Homebuyers purchasing a property in the next year.
This is for those aged 18 to 39 to save up to £4,000 every tax year, either for their first home or retirement from age 60.
It pays a tax-free 25 per cent bonus when you buy a first home worth up to £450,000, as long as you have held the Isa for at least a year.
BEST FOR: Homebuyers not purchasing for a least a year who save more than £200 a month.
THIS IS MONEY’S FIVE OF THE BEST CASH ISA DEALS