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ISAs or savings accounts

If your goal is to save money, you'll need to decide where to keep your savings.

Two options are Individual Savings Accounts (ISAs) and savings accounts.

While both could help your money grow, picking the right one (or a combination of both) for your circumstances can help ensure your money grows as fast as possible. 

What is an ISA?

ISAs are a tax-efficient way to save money. The government sets a limit for how much can be saved each financial year, and doesn't charge any tax on the interest/income you earn. In the current tax year, this limit is £20,000. There are several types of ISAs including:

  • cash ISAs – these are like ordinary savings accounts, except interest on your savings is protected from tax
  • stocks and shares ISAs – these protect various types of investment income from tax

Some ISAs have certain conditions and bonuses that can help speed up your saving.

How are ISAs changing in the 2024 / 2025 tax year?

Cash ISA age limit

From 6 April 2024, there are changes to how old you need to be to open a cash ISA.

To open a new cash ISA, you need to be either:

  • 18 years old or over, or
  • Covered by the transitional arrangements for those aged 16 or 17 (as of 5 April 2024), which is in place until 5 April 2026

ISA providers aren't obliged to offer the transitional arrangements. HSBC won't allow customers under 18 to open a new cash ISA from 6 April 2024, but will consider changing this in the future.

Subscribing to more than one of the same type of ISA

If you're aged 18 or over, you'll now be able to subscribe to more than one of the same type of ISA in the same tax year – subject to staying within the overall annual limit.

For example, you could subscribe to a cash or stocks & shares ISA with one ISA provider and also subscribe to one with a different provider.

This change doesn’t apply to Lifetime ISAs, where it's still only possible to subscribe to one Lifetime ISA in a tax year. HSBC doesn't offer Lifetime ISAs.

From April 6 2024, ISA providers are not obliged to allow subscriptions to more than one ISA of the same type in the same tax year with themselves, and HSBC will not be offering this.

Other optional changes that not all providers are implementing

If you've gone a whole tax year without making a subscription to an existing ISA, you can now restart subscriptions without needing to complete a new application.

Since 6 April, some providers allow you to make a partial transfer of subscriptions made in the current tax year, but HSBC is not currently allowing this.

We'll update our website if we make any changes to our ISAs in the future.

What is a savings account?

You can use a savings account to put away money you don't immediately need in order to earn interest. Depending on your circumstances, you may be charged tax on the interest earned. Some accounts may also have restrictions on making withdrawals. 

Easy access accounts

You can withdraw your money whenever you like without paying a penalty. The interest on these accounts is usually not fixed, so banks may alter the interest rate.

Fixed term accounts

You can put your money away for a set period of time and will earn a fixed rate of interest, but there may be restrictions on how you can access your money.

Regular savings accounts

You can contribute money each month up to a certain limit. These accounts usually offer a slightly higher interest rate than ordinary savings accounts, but there may be restrictions on how you access the money.

What ISAs can offer

If you’re saving an amount up to £20,000, an ISA offers you a tax-efficient way to save. 

The value of an ISA can also be passed on to your spouse, or civil partner, tax-efficiently if you pass away. This isn't the case with an ordinary savings account.

What savings accounts can offer

There's no annual limit on how much you can put into savings accounts. 

With your Personal Savings Allowance (PSA), you can:

  • earn up to £1,000 a year in interest on savings without being charged tax if you're a basic rate taxpayer
  • earn up to £500 a year without being charged tax if you're a higher rate tax payer

However, this depends on your individual circumstances and may be subject to change in future. Additional rate taxpayers do not qualify for a PSA.

Some savings accounts can also offer more flexibility in accessing your money. This can be helpful if you’re not comfortable locking away your money for a set period.

Use our savings comparison tool to help find the right savings account for you.

The value of any tax benefits described depends on your individual circumstances. Tax rules may change in the future.