Investment Guide: Fixed rate ISAs explained

Understand fixed rate ISAs before you start investing in them in 2013

13:06 09 March 2013

Are you seriously considering fixed rate ISAs? Then, there are some important things that you need to know. Some of them are the following: 

• Most Fixed rate cash ISAs offer higher rates compared to notice period or access I

 

• It’s important that you invest the money that you will not be needing anytime soon so you can commit your money for the full term. 

 

• If you withdraw from sale to new customers, you will not be allowed to make further additions. 

 

• You are allowed to hold more than one cash ISA at any one time. 

 

• You cannot open more than one cash ISA per tax year. 

 

Fixed rate ISAs, as the term implies, pay savers a specific amount of interest over a specified term. 

 

In the 2012 to 2103 tax year, individual savers are allowed to deposit up to £5,640. The good thing about this is that compared to fixed rate bonds, the interest that you earn from your ISAs are tax-free as long as you don’t exceed the allowance. 

 

Fixed rate ISAs are great options especially now that the economy isn’t getting better. With this option, savers are assured of earning fixed amount and won’t have to worry about unpleasant surprises along the way.