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ISAs

An ISA (individual savings account) is a way of saving money without paying personal tax on interest or returns you earn. ISAs were introduced by the Government to encourage people to save more. There are two main types of ISA.

Cash ISAs
These are a form of savings account where you won’t have to pay tax on the interest you earn on your savings.

Stocks and shares ISAs
These allow you to invest money in stocks and shares without paying capital gains tax on any money you make through growth in the value of your shares. You’ll have no personal tax to pay on any income received from corporate bonds and gilts. You don't have to pay the extra 22.5% higher rate or 32.5% additional rate tax on the gross dividends from shares held in an ISA if you're a higher or additional rate tax payer.

Tax-free or tax-efficient

Cash ISAs are tax-free, meaning that you pay no tax on your interest. Stocks and shares ISAs are tax-efficient, which means they have a favourable tax status. There are other types of tax-efficient savings and investments available in the UK, such as pension plans and National Savings and Investments.

The favourable tax treatment for ISAs depends on your individual circumstances and may vary in the future.

Cash ISAs

 

Account Cash ISA Allowance Interest rate Withdrawals possible Interest earned on balances over Manage online Move previous years ISAs? Additional deposits
Cash ISA Saver £5,760 Up to 1.00% tax free/AER variable. This rate includes a fixed introductory bonus of 0.50% payable for 12 months from the date of account opening.
 Yes
 £1 Yes Yes Yes
Two Year Fixed Rate Cash ISA £5,760 Up to 1.90% tax free/AER fixed Yes

A charge equivalent to a number of day's tax free interest applies to withdrawals.
 £1

A minimum lump sum of £3,000 is needed to open the account.		 Yes Yes Yes
Three Year Fixed Rate Cash ISA £5,760 Up to 2.10% tax free/AER fixed Yes

A charge equivalent to a number of day's tax free interest applies to withdrawals.
 £1

A minimum lump sum of £3,000 is needed to open the account.		 Yes Yes Yes
Four Year Fixed Rate Cash ISA £5,760 Up to 2.15% tax free/AER fixed Yes

A charge equivalent to a number of day's tax free interest applies to withdrawals.
 £1

A minimum lump sum of £3,000 is needed to open the account.		 Yes Yes Yes

Junior Cash ISA

Save for your child’s future with a long term, children’s savings account. Our Junior Cash ISA was launched as part of the Government’s Junior ISA initiative. Open with a minimum of £1 and earn a variable rate of 3.00% Tax free/AER.

Where the child is under 16 the Junior Cash ISA is managed by a parent (or someone with parental responsibility). A child can ask to take control of their account at any time after their 16th birthday. Children who are over 16 must open the account themselves. When the child turns 18 the account matures into an adult cash ISA. No withdrawals are allowed from this account until the child is 18. Unlike adult ISAs, it is possible to transfer between Junior cash and stocks and shares ISAs held with the same or different providers.

Stocks and shares ISAs

Account ISA allowance Withdrawals possible Manage online Move previous years ISAs? Additional deposits
Share Dealing ISA £11,520 Yes No Yes Yes

THE VALUE OF YOUR INVESTMENTS AND THE INCOME FROM THEM CAN GO DOWN AS WELL AS UP AND YOU MAY GET BACK LESS THAN YOU ORIGINALLY INVESTED. YOU MUST BE AT LEAST 18 OR OVER TO OPEN A STOCKS AND SHARES ISA.

Important legal information

Lloyds TSB Bank plc and Lloyds TSB Scotland plc are authorised and regulated by the Financial Services Authority except for lending where we are licensed by The Office of Fair Trading. FSA authorisation can be checked on the FSA’s Register at: www.fsa.gov.uk/register. Lloyds TSB Bank plc and Lloyds TSB Scotland plc are members of the Financial Services Compensation Scheme and the Financial Ombudsman Service. We subscribe to the Lending Code; copies of the Code can be obtained from www.lendingstandardsboard.org.uk.

Lloyds TSB Bank plc Registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales No. 2065. Lloyds TSB Scotland plc. Registered office: Henry Duncan House, 120 George Street, Edinburgh EH2 4LH. Registered in Scotland No. SC95237.

Save the Change® is a registered trademark of Lloyds TSB Bank plc.

AER stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year. As every advertisement for a savings product, which quotes an interest rate, will contain an AER you will be able to compare more easily what return you can expect from your savings over time. Gross rate is the contractual rate of interest payable before the deduction of income tax at the rate specified by law.

The tax-free rate is the contractual rate of interest payable where interest is exempt from income tax.