Top tips for choosing the best cash ISA


The deadline for the tax year is fast approaching. If you haven’t used this ISA allowance yet, you have until 5 April 2017 to make the most of it. After that it will be gone for ever - it is not possible to carry it over into the new tax year.

Here’s what you need to know about choosing your ISA

Know the rules:

  • A new ISA tax-free limit of £20,000 comes into effect on for the tax year 2017/2018* 
  • You must be a UK resident and over 16
  • You can open a cash ISA from the first day of the new tax year (6 April) and can add savings to it until the end of that tax year (5 April in the following year)
  • You can only pay into one Cash ISA and one Stocks and Shares ISA each tax year and the money in both must not add up to more than the tax limit
  • Married couples both have individual ISAs, meaning it’s possible to save £40,000 tax free a year
  • If you do take money out during the year, the savings limit will remain the same. For example, if you put £20,000 in an ISA on 6 April, you will not be able to pay any more money into your ISA.

Know yourself as a saver: instant access

If you are likely to need instant access to your cash, don’t be tempted to go for a product that limits access in exchange for a higher expected profit rate. Instead, shop around for the best deal that allows you to have access when and where you need it. For example, Al Rayan Bank’s Instant Access Cash ISA currently pays 0.5%; giving you access to your money whenever you need it while still allowing you to generate a tax free return. You can deposit and withdraw funds online, through the post or at one of our branches.

Know yourself as a saver: access – with notice

If you need to access your cash, but are able to let the Bank know in advance of when it’s needed, then a notice cash ISA may be right for you. Al Rayan Bank has just launched a new 60 Day Notice Cash ISA, that currently offers an expected profit rate of 1.0%. You can deposit and withdraw funds online, through the post or at one of our branches.

Know yourself as a saver: no access

Most banks will give you a higher rate of return if you’re able to leave your money with them for longer periods of time. Al Rayan Bank’s 12 Month Fixed Term ISA currently pays an expected profit rate of 1.09%.

Check you’re getting the best rate

Some cash ISAs offered by conventional banks offer competitive introductory interest rates, but then once these expire you could be earning a lot less. Al Rayan Bank does not offer preferential introductory profit rates, preferring instead to offer competitive Sharia compliant profit rates to all customers.

Never withdraw the money if you want to transfer to a new ISA

If you want to transfer your money into a cash ISA with a higher profit rate, do not withdraw the money out of your old ISA. If you do, you will lose all of the tax benefits associated with the account. Your new provider will handle this process for you. Al Rayan Bank accepts transfers in on all of its cash ISA accounts and we’ll be happy to answer any questions you may have.

Al Rayan Bank’s cash ISA range

Al Rayan Bank’s ISAs offers savers a Sharia compliant and ethical way to save, tax free.

Operated under the Islamic finance principle of Wakala, the Bank works as your agent to achieve an expected (or target) profit rate.

All of Al Rayan Bank’s cash ISAs can be managed online, via the post or through its branches.

Find out more about Al Rayan Bank’s Cash ISAs 

* This is our understanding of current tax laws and may be subject to change

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