ISA Guide

What are ISAs?

What's an ISA?

ISA stands for individual savings account. ISAs are an efficient way to save and invest as you pay little or no tax on the interest you earn up to the annual ISA allowance.

Benefits of having an ISA

Whatever your savings goals, having an ISA could be a good idea.

Some ISAs give you instant access to your money, offering you a more flexible way to save and plan your finances in the shorter term.

There are also Fixed Term ISAs designed to give you 1 or 2 years Fixed Interest. 

If you have longer term savings goals, ISAs can help you save and invest in a tax-efficient way. Stocks and shares ISAs are supposed to be a medium to long-term investment. This means they should be held for at least five years.

Your ISA allowance applies to you as an individual. Being married or in living with your partner, for example, won’t affect your allowance.  

Types of ISA

There are four types of ISAs available but not all providers will offer each one:

Cash ISAs - Simple, tax-free savings accounts.

Stocks and shares ISAs - These are classed as tax efficient investments.

Innovative finance ISA - Peer-to-peer lending investments that are classed as tax efficient investments.

Lifetime ISA - Lifetime ISAs can be classed either as tax-free savings or tax-efficient investments.   

The cash ISAs that we offer

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Cash ISA

Our Cash ISA is an instant access savings account with variable interest rates. This means the interest rate can go up or down. Must be 16 or over and UK resident.

Fixed Rate ISA

We offer a 1 or 2 fixed rate ISA, meaning the interest rate is fixed for whatever period you choose. You can’t pay in or take money out once the term has started. If you do, an Early Closure Charge may apply. Must be 16 and over and UK Resident. Minimum deposit required.
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Help to Buy: ISA

A UK government scheme for first-time buyers. You’ll get a 25% bonus towards the cost of your first home when you save £1,600 to £12,000 into a Help to Buy: ISA. You must be 16 or over, resident in the UK and a first time buyer. Conditions apply.

Making payments and withdrawals

Paying into an ISA

Paying into an ISA is known as subscribing. You can subscribe to one of each type of ISA in a tax year, providing that you don’t subscribe more than your ISA allowance across all of them. The 2018/19 tax year runs from 6th April 2018 to 5th April 2019. Your allowance for this year is £20,000.

Although the Help to Buy: ISA is a type of cash ISA, you can pay into to a Help to Buy: ISA and a Cash ISA in the same tax year if both accounts are with NatWest. Your ISA allowance will be spread across both. With a Help to Buy: ISA, you can pay in up to £200 per calendar month. Find out more about our Help to Buy: ISA.  

Taking money out of our ISAs

If you have our instant access Cash ISA, you can’t withdraw money and then reinvest it in the same tax year if it means your total deposits would be more than your ISA allowance.

For example: The ISA allowance is £20,000. If you pay £16,000 into your cash ISA and take out £500, you can only save up to £19,500 by the end of the tax year.

If you have our Fixed Rate ISA, you can’t take money out during your one or two-year term. To access your money, you’d have to close your account and pay an Early Closure Charge may apply.

What you could do with your ISA

Make further deposits

If you have a variable rate cash ISA, you can keep paying into it for as long as you like, providing you don’t go over your yearly ISA allowance. However, if you don’t pay into it for an entire tax year, you’ll need to reactivate your account before making your next deposit. 

Reactivate your cash

To reactivate a cash ISA, just fill out our online reactivation form

Transferring your ISA

You can only pay into one cash ISA per tax year. If you want to switch your ISA to another provider, there’s a process in place which safeguards your tax-free entitlement. Transfers can take up to seven working days.

Visit our ISA transfer page to find out more.  

Transferring your stocks and shares ISA to a cash ISA

It can take up to 30 days to complete the transfer of a stocks and shares ISA to a cash ISA. Your stocks and shares ISA provider will sell your investments and send the cash to your new provider. Your new provider will put the cash into your account, keeping it within the ISA wrapper. Your tax-efficient entitlement will be safeguarded by the transfer process.

Visit our ISA transfer page to find out more.  

For more detailed information on our ISAs and how you can make the most of tax-efficient savings, download our complete ISA guide.

What to do next

Now that you're familiar with our range of ISAs and how they work, here's what you can do next.

If you already subscribe to a cash ISA, you can carry on saving into this account as long as you don’t go over your annual ISA allowance. Or you can open and transfer to a new ISA.

Great decision. To make the most of your ISA allowance, try and open your new ISA before the last day of this tax year (5th April 2019).

Not sure an ISA is for you?

If you're unsure ISAs are the right savings accounts for you we offer other ways you could save with us.

Something else we can help you with?