ISAs explained

How to keep more of your money

Discover how an ISA account can help you keep more of the interest you earn, year after year.


What is an ISA?

An ISA (or Individual Savings Account) is a tax-efficient way to save. When you open an ISA account, you can earn tax-free interest on your savings, with a total annual ISA allowance of £20,000 for the 2020/21 tax year.


What are my ISA options?

There are four different types of ISA account. Please note that Yorkshire Building Society only offers Cash ISAs.

Cash ISA

A Cash ISA is a tax-free savings account available from age 16. You don't pay any tax on the interest you earn, so every penny is yours to keep. You can start saving with as little as £1. Once your money is in, then so long as it stays in – it stays tax free.

While you can only have one Cash ISA per tax year, you can split your ISA allowance across different products . For example, our range of Cash ISAs includes Instant and Fixed Rates ISAs. You can also transfer previous ISA subscriptions to both fixed and variable rate ISAs.

How do cash ISAs work?

  • Save up to £20,000 in the 2020/2021 tax year
  • Transfer in your savings from existing ISA accounts, either with us or with another provider
  • Get access to your money in the short or medium term, depending on the specific terms and conditions of the account
  • Any withdrawals from tax-free accounts will result in a loss of your tax-free allowance, other than transferring to another ISA, subject to terms & conditions.
  • If your ISA is flexible this means you can replace money withdrawn from your ISA without this affecting your annual allowance, as long as the replacement funds are made in the same tax year in which the withdrawal takes place.
  • If you have a break between ISAs of a year or more, you will need to complete a Break Between Subscription Form (PDF). This is a requirement of HM Revenue and Customs and we can’t accept funds into a new ISA account until the form has been completed and returned.

Other types of ISA

The other 3 types of ISA which aren’t offered by Yorkshire Building Society are:

  • Stocks & Shares ISAs (from age 18)
  • Innovative Finance ISA (from age 18)
  • Lifetime ISA (from age 18)

These ISAs are worth considering for money that you can leave untouched for at least 5 years or more. Although Stocks & Shares ISAs are tax efficient, they are not completely tax-free. By choosing a Cash ISA you will benefit from tax-free interest.

 

Fixed or variable ISA rates?

What is a fixed rate ISA?

Fixed rate Cash ISAs may allow you to save with a better rate of interest provided you put your money away for a fixed period. Your interest rate will also be fixed. Just like any other ISA, you can save up to £20,000 tax-free (2020/21) and you’ll pay no tax on the interest you earn.

Why get a fixed rate ISA?

Everyone’s circumstances are different, but you may want to choose a fixed ISA if the following applies to you:

  • You have a lump sum of cash that you won’t need to spend in the short term.
  • You want a guaranteed rate of interest over the term of the fixture.

What is a variable rate ISA?

With variable rate Cash ISAs – sometimes referred to as easy access cash ISAs – the interest rate can rise or fall depending on market conditions. The advantage is that you’ll have more flexibility to access your money – some products offer unlimited withdrawals, known as instant access savings – but you will earn less interest compared to a fixed rate ISA.

Why get a variable rate ISA?

A variable rate Cash ISA may be a good option if the following criteria apply to you:

  • You want the freedom to access to your funds at any time (withdrawals will still count to your overall ISA allowance.)
  • You want the flexibility to withdraw and replace funds through flexible ISAs within the same tax-year without affecting your overall ISA allowance limits.

Limits and allowances

You can invest in any combination of the four types of ISA in one tax year up to your total annual ISA allowance limit, which is £20,000 for the 2020/21 tax year; however, the annual contribution limit into a Lifetime ISA is £4,000.

Yorkshire Building Society only offers Cash ISAs.

What if I don't use all my allowance?

As soon as a tax year ends on the 5th April, any allowance for that tax year ends too.

That means if you don't use all your allowance, you'll miss out on using any remaining allowance for that tax year.

Am I eligible?

If you'd like to open a Cash ISA you must be aged 16 and resident in the UK for tax purposes.
If you want to open a Cash ISA and you’re resident in a country outside of the UK for tax purposes you must be a qualifying crown employee or be married or in a registered civil partnership with a qualified crown employee.

How does my Personal Savings Allowance impact my ISA allowance?

ISAs are tax free savings accounts, so the interest earned in an ISA doesn't count towards your Personal Savings Allowance. You can find out more about personal savings allowances here.

Why transfer an ISA?

Transferring from one type of ISA to another, or transferring your ISA between different banks or building societies, can be a smart way to protect your savings.

Transfer your ISA to Yorkshire Building Society

To transfer your ISA from another provider to the Yorshire Building Society you will need to use our ISA transfer forms.

Find the best ISA rates

When you first took out an ISA, you may have received a good introductory rate as a new customer, but that doesn’t necessarily last. For this reason, some customers will monitor the market and look for the best ISA deals, especially if they can reduce their management costs paid to a provider.

Manage your savings

Another reason to transfer from other ISAs is to consolidate your money in one place, and manage it more easily. Equally, you may wish to spread your savings across different types of ISA to reduce your risk.

Remember, your eligible deposits with Yorkshire Building Society are protected up to a total of £85,000 by the Financial Services Compensation Scheme.

ISA transfer rules

Transferring is not the same as depositing money – you can transfer as many times as you like, and doing so means your savings can remain tax-free, as the £20,000 annual limit applies to deposits, not transfers. In contrast, if you withdraw funds and deposit the money into another ISA, this will count towards the current tax year.

It’s worth checking whether your account will incur any charges for transferring ISA funds. Transfers between Cash ISAs should be straightforward, but the process can be more complicated when transferring between other types of ISA account – such as Stocks and Shares ISAs – as different rules apply.

Can I transfer my allowance?

Although you can only save into one of each type of ISA in each tax year, you're free to move your money around in different ways, as long as the product terms and conditions allow it.

Transfer from a previous tax year's Cash ISA

Move all or some into another Cash ISA, or a Stocks and Shares ISA or an Innovative Finance ISA without affecting this year’s allowance.

Transfer from the current tax year's Cash ISA

Move money saved in a Cash ISA this tax year with the same or a different provider as long as you move the whole amount without splitting it. Alternatively you can transfer all or some of the balance into a Stocks and Shares ISA and/or Innovative Finance ISA up to the maximum allowance of £20,000. Please check with your existing ISA provider for any charges applicable on transfer.

Transfer from a previous tax year's Stocks and Shares ISA

Move all or some into another Cash ISA, or a Stocks and Shares ISA or an Innovative Finance ISA without affecting this year’s allowance.

Transfer from the current tax year’s Stocks and Shares ISA

Move the whole amount saved this tax year into another Stocks and Shares ISA and if it’s less than £20,000 you can then save the remaining allowance in the same Stocks and Shares ISA. You can also transfer into a Cash ISA and/or an Innovative Finance ISA up to the maximum allowance of £20,000. Please check with your existing ISA provider for any charges applicable on transfer.

Transfer from the current tax year’s Innovative Finance ISA

Move the whole amount saved into another Innovative Finance ISA and if it's less than £20,000 you can then save the remaining allowance in the same Innovative Finance ISA. You can also transfer into a Cash ISA and or Stocks and Shares ISA. Please check with your existing ISA provider for any charges applicable on transfer.

 

How to transfer an ISA to Yorkshire Building Society

You can transfer your ISA online. If you are not registered for an online account you can registerhere. You can also request a transfer by downloading and completing the relevant application form and returning to the address on the form or take it to a branch or agency.

If you do not yet have an ISA with Yorkshire Building Society first you'll need to open an account and then arrange the transfer.

Transfer your ISA to Yorkshire Building Society

If you haven't already got an ISA with us, you'll first need to open an account and then arrange the transfer.

ISA Transfer forms

Cash ISA External Transfer - YBS1054

Please complete this form to transfer your cash ISA from another provider to an existing Yorkshire Building Society cash ISA.

Cash ISA Internal Transfer Form - YBS1057

Please complete this form if you want to change your existing Yorkshire Building Society cash ISA to a new Yorkshire Building Society cash ISA.

Cash ISA Internal Transfer/Merge Instruction Form (amalgamation) - YBS1056

Please complete this form if you wish to transfer/merge your existing Yorkshire Building Society or Chelsea Building Society cash ISA to an existing Yorkshire Building Society ISA.

Stocks and Shares ISA to YBS Cash ISA Form - YBS1059

Please complete this form if you have a Stocks and Shares ISA with another provider which you want to transfer the funds of into new cash ISA with Yorkshire Building Society.

*Please note that providers have 15 working days plus any notice period that applies to your account to transfer Cash ISAs and 26 working days to transfer Stocks and Shares ISAs. Upon receipt of your funds from your current provider, we will credit/open your Yorkshire Building Society Cash ISA and send you written confirmation.

ISA FAQs

Can I cancel a Cash ISA account

Yes, you can cancel your account if you change your mind within 14 days. There's no notice or charge - we'll simply refund your money along with any interest it's earned and you'll be free to open another ISA in the same tax year.

To cancel within 14 days, simply write to the branch or agency where you opened your account or call 0345 1200 300*.

If you do not cancel your subscription within the 14 day time period please note you will have automatically subscribed to a Cash ISA for this tax year and you will not be able to open another Cash ISA with us or any other provider in the same tax year.

What are the benefits of an ISA?

Some of the benefits of a Cash ISA include:

  • Earn tax-free interest on your savings
  • Save up to £20,000 in the 2020/2021 tax year
  • Replace money taken out from your ISA without affecting your annual ISA allowance (if your ISA is flexible).
How many ISAs can I have?

You can only have one Cash ISA per tax year, but you can split your ISA allowance across various products, such as the Help to Buy ISA, or Fixed Rates ISAs.

Are ISAs tax free?

Cash ISAs give you tax-free interest, compared to Stocks & Shares ISAs, which are tax efficient but not entirely tax-free.

How much can I put in a Cash ISA?

In one tax year you can put in up to £20,000; the annual contribution limit for a Lifetime ISA is £4,000.

Other accounts

Why not take a look at our other types of savings accounts?

View all rates

Help & support

Find out more about how to open accounts, make deposits and access your money.

Help & support

Need help with interest definitions?

If you are unclear what something means, our Savings glossary can help.

View glossary