How to pick the Isa that's right for you

There is an Isa out there for every saver, but working out which one is for you is not always straightforward. 

The Isa family has grown over the years so there are now five different types to choose from.

Cash Isas are perfect if you are growing a small nest egg or would like a home for savings that you will need in the next few years.

They work in much the same way as a standard savings account. You open an account, pay in some cash and receive interest in return.

As with all savings accounts, some Cash Isas allow you to access your cash whenever you choose and without giving notice, whereas others lock your money away for an agreed period of time.

The only key different between Cash Isas and other savings accounts is that in the former all interest earned is tax-free.

Cash Isas had fallen out of favour in recent years and savers were just as happy putting their money in a standard savings account.

That is because they were earning such little sums of interest that few were having to pay tax anyway.

Source of data and images: dailymail

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