ISA accounts-How they work

 
 

We offer a tax free investment account, the ISA-60 Cash Saver.  A summary of the main features of this account is shown below :

ISA-60 Cash Saver

  • Tax free interest earned from day of receipt
  • Minimum balance £1
  • Maximum investment £3,000 per year until 5 April 2010.
  • Additional investments subject to statutory subscription limit
  • Attractive tiered interest rates
  • Interest paid annually
  • 60-days notice for withdrawals (or 60 days loss of interest)
  • If you make a withdrawal, your account can be topped up again as long as the total amount you put in does not exceed your tax-free allowance. For example, if you opened a Cash ISA in the current tax year with an initial deposit of £2,800, because your tax-free allowance would be £3,000 you could only pay in an additional £200 during the tax year, regardless of how much money you withdraw.

What are ISAs?

An Individual Savings Account (ISA) gives you the opportunity to benefit from tax free interest on your savings.

There are two types of ISA currently available:

  • Mini ISAs
  • Maxi ISAs

As an approved ISA Manager, The Chesham Building Society can offer you a mini cash ISA.

The difference between Mini and Maxi ISAs

  • Maxi ISAs

A maxi ISA is managed by one ISA Manager. You can invest the maximum amount allowed each tax year in to a Maxi ISA. The investment can be entirely in stocks and shares (£7,000 up to tax year 5 April 2010), or you may also include a cash element.

  • Mini ISAs

There are two types of Mini ISA – cash and stocks and shares. You can have one of each Mini ISA, although you do not have to have them all. You can choose a different ISA Manager for each Mini ISA.

The maximum investment in a mini cash ISA is £3,000 in one tax year. Only one mini cash ISA is permitted in each tax year.

The maximum for a mini stocks and shares ISA is £4,000 in one tax year.

In deciding which type of ISA is right for you, you need to consider whether you may want to invest more than £4,000 in stocks and shares in the tax year. If this is the case, a Maxi ISA may be the right choice for you.

This account does not satisfy the minimum standard for a deposit-based stakeholder product.

Favourable Tax Treatment

The information shown is based on our understanding of current law, ISA regulations and Inland Revenue practice at the time of going to press. Future changes in legislation and tax practice could affect this information. Current favourable tax treatment may not be maintained in the future.

ISA-60 Cash Saver 
 

 INTEREST ADDED ANNUALLY
  Rates from 8 September 2006 Previous Rate
BALANCE % Tax Free /AER % Tax Free /AER
£1+ 4.60 4.35
£3,000+ 4.95 4.70
£5,000+ 5.10 4.85
  • The gross rate is the contractual rate of interest payable
  • Tax Free – interest paid on this account is not subject to income tax.
  • Subject to the Rules of the account and the subscription limits of the Inland Revenue.
  • All rates quoted are variable