Cash ISA account holders have been urged to bear in mind a key aspect of their accounts. MoneyMagpie warned there are several things to consider with Cash ISAs, and understanding your account is crucial to ensuring you’re putting your money in the right place.
A key aspect experts urged account holders to remember is that they can’t replace withdrawn funds from their Cash ISA. Money Magpie says: “With a standard Cash ISA, if you take money out, you can’t put it back in without it counting towards your annual allowance.
“So, if you deposit £20,000 and then withdraw £5,000, you can’t top it back up unless you wait until the next tax year.
“Some flexible ISAs allow it, but it’s not a given—so always check the small print!”
But this is not the only tip the money experts suggest.
Having a Cash ISA, they noted, may not be for everybody as there are some impractical aspects, so people should make sure this is definitely the right account for them when setting them up.
Money Magpie said: “One of the biggest grumbles about Cash ISAs is that the interest rates tend to be pretty low. In fact, they often struggle to keep up with inflation.
“This means that while your savings might be growing in number, their actual spending power could be shrinking. Not ideal if you’re looking to grow your money over time!
“A better alternative to consider is a stocks and shares ISA, which provides returns that typically outpace inflation (although they also come with higher risk!).”
If you’re thinking about the best place to keep your savings, make sure to do your research to ensure you won’t make any mistakes or regret any of your decisions.
