What Is an ISA?

The what, why and how of Individual Savings Accounts

Alanna Petroff 11 March, 2013 | 6:00AM

This article is part of the special series, Investing with ISAs.

What Is an ISA?
An ISA is an individual savings account. British residents use ISAs to avoid paying tax on money held within these accounts. You can hold cash, shares, funds, investment trusts, ETFs and/or bonds in an ISA.

The main benefit of having an ISA is that your money is more or less immune from taxes. You avoid paying income tax on interest and dividends, and you avoid paying capital gains tax on portfolio gains.* ISAs were created by the government in 1999 to promote a savings culture in the UK.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

Alanna Petroff

Alanna Petroff  is a financial journalist with Morningstar UK.

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