If you managed to make use of your Individual Savings Account (ISA) allowance in the last tax year, then you will be pleased to know that as of 6th April, you have another £7,200 of potential tax free investments in which you can deposit into ISAs.

If you didn’t manage to use up last years ISA allowance don’t worry, just deposit your savings into an account as soon as possible and benefit from tax free returns on your investment.

If you haven’t yet considered ISAs as a method of saving, you could be missing out on tax free returns, so it is well worth looking into opening an ISA.

Each year, savers are provided with a unique savings opportunity to earn tax free returns on investments. Everyone aged 16 or over is eligible to the £7,200 yearly tax free allowance, which can be used for both investment and cash ISAs. You can use as much or as little of the allowance as you wish, using up to the full £7,200 in an investment ISA, or up to £3,600 in a cash ISA, and the rest in an investment ISA.

ISAs are similar to savings accounts, with some providers offering fixed rate ISAs allowing people to protect themselves against falling rates for the term of the ISA. Investment ISAs are now becoming more and more popular, as it is possible to make unlimited tax free earnings on your investment. One thing to be aware of when dealing with stocks and shares ISAs is that you are given the opportunity to make massive returns in exchange for the risk that you could also lose money, and this is where they differ from cash ISAs.

The way in which your account is manages will depending on which ISA and ISA provider you choose. Whether you’re looking to invest a one off lump sum at the beginning of each year; you want to make monthly deposits, there are plenty of ISAs that will suit your needs, plus you can decide how and when you want your interest to be paid.

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