Individual Savings Account (ISA Savings) is a similar to a normal bank savings account with an added advantage that lets you save money without paying tax. According to the law passed by the government, people who invest for the first time in ISA before the 5th of April can still benefit from the ISA allowances of 2009/2010. This means that ISA account holders can save up to £7,200 in any of the two kinds of Individual Savings Account namely: Cash ISAs or Stock and shares ISA.
Cash ISAs
The cash ISAs lets gives you the security of having a bank account and an added advantage of saving tax. When you make use of the allowance each year, you will be able to achieve tax-free growth on the saved money. Hence, it is any time better than a conventional bank account.
Stocks and Shares ISA
The stocks and shares ISA also lets you save on tax but it is not completely tax-free in which the money is invested in stock markets. As compared to ISA, stocks and shares ISA is considered to be risky because it is a stock market investment. People who hold such an account can expect good returns on long term basis.
