Individual Saving Account
by admin on 10/12/09 at 6:22 pm
Individual Saving Account or as it is commonly called ISA is a financial product specifically made to suit the needs of investment and saving along with the benefit of being tax free.ISA includes both cask and stocks.
ISA was introduced on 6th April, 1999 and it replaced the earlier schemes of the government, namely, Personal Equity Plans and Tax Exempt Special Saving Accounts. The earlier schemes mainly catered to suit the needs of the middle class but the ISA rates were clearly introduced to suit the requirements of a wider section of the society
Initially, three types of ISAs were introduced. The three types were, Mini ISAs, Maxi ISAs and Tessa-only ISAs or TOISAs. TOISAs were created so that the capital without interest which had been invested in TESSA up to a limit of 9,000 pounds could have been reinvested in a tax free scheme. Only capital from TESSA could be invested in the TOISAs and thus, new TOISA’s could not be opened after 5th April, 1999. When the budget was announced in 2007, it was declared that there will be no difference between Maxi and Mini ISA and also the limits were increased.
Thus, the ISA’s were a great financial tool for the common man to save and invest and also save tax.
