Mini ISAs

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Mini ISAs

Changes made in the 2008 budget means that all Mini ISAs as described in the article below will automatically become cash ISAs.

Some aspects of the products described below may be obsolete.

You can choose to invest in either a Mini ISA or a Maxi ISA in each tax year. As with a Maxi ISA, there can be three components:

• Cash
• Shares
• Insurance
  

You do have to stay within the investment limits (see our Tax Guide) however, think of the ISA as held in three separate boxes. Each component goes into its own box so you can choose a different provider for each of the three if you like their terms or interest rates.

You could hold your cash in a bank account, have a share ISA held with a unit trust company and a life insurance policy held elsewhere again.

You don't have to invest all at once, you can add into the ISA during the tax year, but if you open a mini ISA you cannot open a maxi ISA in the same tax year.

As with the maxi ISA, you can add into each of these components during the tax year or invest the whole amount at once. You can withdraw money or sell shares during the tax year, but once you've contributed up to the limit for each component, you cannot add any more in.

You can transfer ISAs to different providers during the tax year if you find you could get a better rate of return somewhere else.