One of the benefits of a traditional ISA is that any funds invested will accrue a somewhat predictable amount of wealth. During this time, all of the profits realised are not subject to capital gains or income tax. However, there is a specific type of ISA that is known as an instant-access ISA. This plan will enable the customer to withdraw any funds as may be necessary. So, it can be seen that this vehicle is more liquid than a normal ISA. With a maximum cash allowance of up to fifteen thousand pounds, this concept can be a powerful tool in managing one’s wealth.

Top 5 Instant Access ISA Accounts

Provider Interest Rate Minimum opening deposit Features

HSBC Loyalty Cash ISA – Advance customers
1.50% £1
  • Only available to HSBC’s Advance Current Account customers.
  • Rate includes a bonus payable for 12 months
More info

National Savings & Investments Direct ISA
1.50% £1
  • Account can only be managed online
  • This account allows unlimited access to your money.
More info

Post Office
Premier Cash ISA
1.50%
variable
£100
  • You can make a maximum of 2 withdrawals each tax year
More info

Sainsburys Cash ISA
1.45%
variable
£500
  • Unlimited withdrawals
  • Account can only be managed Online or by Telephone
More info

HSBC Loyalty Cash ISA – Current Account customers
1.40% £1
  • Rate includes a bonus payable for 12 months
  • Only available to HSBC’s existing current account customers.
More info

The Types of Instant-Cash ISAs

The main subcategories of this type of ISA are those which offer variable interest rates and plans that supply a fixed amount of interest. Those with variable interest will follow the predominant market rates. Of course, this can be beneficial depending upon where these rates fall. However, it is also wise to recall that interest rates can also take away from one’s financial gains.

Fixed rates are obviously more stable, but the customer will not be able to take advantage of any market conditions (this can again affect the overall profit margins). Different institutions can provide varying minimum deposit amounts, possible introductory offers and even bonus rates that can be enjoyed after a certain period of time has elapsed; a year for most programmes.

Things to Consider Before Investing

Although the ability to access quick cash is indeed enviable, it should be recognised that most institutions will charge a fee with any such transactions. This needs to be taken into account, as hefty surcharges can take away from the profits that were realised. Also, after one pays in his or her full cash allowance, no additional funds can be placed into the ISA during the same tax year. This can be a concern if one expects to be on a limited budget sometime in the future. As the deposit limit has now been raised to fifteen thousand pounds, it may be wise to diversify this money into other areas of a portfolio to maximise profit margins.

Encountering the Best Offers

An important variable to identify is the entry-level interest rate. Of course, this will vary from provider to provider. Comparing services through the Internet is ideal in this case. Other points are:

  • The type of access (telephone, mobile phone or Internet).
  • The gross rate (the interest that is paid before the income tax deduction).
  • The possibility of transferring all existing ISAs into one instant plan.

These are all quite valid concerns and they will enable the consumer to encounter the most appropriate plans.