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What is an ISA?
An ISA is an Individual Savings Account. If you save in an ISA you are entitled to keep all that you receive from that investment and not pay any tax on it. This is not the case with, for example, an ordinary bank or building society account unless you are a non-taxpayer.
ISAs began on 6 April 1999 and will be around for the foreseeable future. You can save up to £20,000 in the tax year 2018-19. A tax year runs from 6 April to 5 April in the following year.
You can put money in and take it out whenever you want.
The ISA scheme provides different ways of saving to meet people’s different needs. You can plan for the short term, or put your money away for much longer for example as an alternative to pensions.
What is an Investment Bond?
An Investment bond is a vehicle for investing lump sums, so say if you have a lump sum of £30,000 then an Investment Bond may be right for depending on your circumstances.
Bonds are taxed at the basic rate of income tax with the fund, so when you take your money out if you are a basic rate taxpayer you should have no further tax to pay.
Investment bonds have their benefits however to find out if they may be suitable for you, you should seek advice from an Independent Financial Advisor.