ISA: Can I have more than one ISA?
ISAs are a tax-free way of saving money and accounts vary depending on how you want to save, from investment accounts to helping users save for a home. You can open an ISA with a bank, building societies, insurers, asset managers and National Savings and Investments (NS&I).
Depending on how you want to save will determine which ISA you should open, whether it is to save for a deposit for your first home, just have a simple savings account or invest your savings to go further.
There are four types of ISAs for adults: cash ISAs, stocks and shares ISAs, lifetime ISAs, and innovative finance ISAs.
For those under 18, there is also the opportunity to open a Junior ISA to save in stocks and shares or in cash.
Some ISAs are Government-backed, with a bonus added to your savings each month based on how much you save.
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Can I have more than one ISA?
You can have multiple ISAs, but you can open only one cash ISA in each tax year.
So, if you have opened a cash ISA since April 6, 2020, you cannot open another one until April 6, 2021.
Transfers are not included in this, so if you have opened a cash ISA this tax year and paid new funds into it, you can still transfer funds from previous cash ISAs into another ISA account.
You can save up to £20,000 in ISAs in the current tax year, and this allowance can be used in one type of ISA or any combination of the four, as long as you don’t exceed the £20,000 annual allowance.
This includes ISAs across multiple banks or building societies.
The amount you can pay into your ISA may be limited by the type of ISA you have.
For example, the maximum amount you can pay into a Help to Buy: ISA is £200 per month.
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The tax year runs from April 6 one year to April 5 the next and you can’t carry any unused amount over to a new tax year.
The ISA allowance simply resets back to the annual allowance again on April 6.
Types of ISA
Cash Isa – also known as a Basic Isa
This is a savings account which has a £20,000 allowance. Tax-free interest.
Stocks and shares Isa also known as an Investment Isa
This is an investment account again with a £20,000 allowance.
Tax-free gains, no further tax on dividends, tax-free interest.
Innovative finance Isa – also known as a Peer-to-peer Isa
This is a peer-to-peer lending account with a £20,000 allowance. Tax-free interest.
Help to Buy Isa
This is a savings account for first-time buyers. You can save £3,400 in the first year and £2,400 thereafter.
Given this is a Government scheme you will receive a 25 percent top-up on your savings. Tax-free interest.
Unfortunately, this scheme is now closed to new savers, having closed on November 30, 2019.
Lifetime cash Isa – also known as Lisa
This is a house deposit and/or retirement savings account.
Account-holders have a £4,000 allowance. Again as this is a Government scheme your savings will receive a 25 percent top-up.
Tax-free interest. Only those aged 18-39 can open.
Lifetime stocks and shares Isa – also known as Lisa
This is a house deposit and/or retirement investment account with a £4,000 allowance each tax year.
As this is a Government scheme, you will receive a 25 percent top-up.
Tax-free gains, no further tax on dividends, tax-free interest. Only those aged 18-39 can open.
Junior cash Isa – also known as – Jisa
This is a savings account for under 18s with £4,368 allowance. Tax-free interest.
Junior stocks and shares Isa – also known as – Jisa
This is an investment account for under 18s, and as with the cash ISA has a £4,368 allowance.
Tax-free gains, no further tax on dividends, tax-free interest.
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