ISA

individual savings account (ISA)

The new tax-exempt savings scheme launched in April 1999 as a replacement for the personal equity plan ( PEP) and tax-efficient special savings scheme ( TESSA). ISAs can be used to invest in a very wide range of investments and consist of three components: cash (bank and building society accounts and National Savings), insurances (investment-type insurance plans) and stocks and shares ( Unit Trusts, OEICS, investment trusts, direct investment in shares, corporate bonds and gilts). From 2000-01 the annual investment limit is £5,000. Financial Services Glossary

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ISA ISA [ˈaɪsə] noun [countable] FINANCE

individual savings account; a savings arrangement in Britain on which you do not have to pay tax:

• ISAs encourage people to leave their savings in the account on a long-term basis.

ˈcash ISA FINANCE

an ISA in a fund that invests in the money market S rather than in shares etc

ˈequity ISA FINANCE

an ISA in a fund that invests in shares

ˈmaxi-ISA FINANCE

an arrangement where you put money into an ISA at only one financial institution, up to a limit set for a particular year

ˈmini-ISA FINANCE

an arrangement where you can put money into ISAs at several different financial institutions, up to a limit set for a particular year

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ISA UK US /ˈaɪsə/ noun [C]

► BANKING UK ABBREVIATION for individual savings account: an investment account in which the investor does not have to pay tax on income or on the increase in value of shares: in/into an ISA »

They put £50 a month into an ISA.

ISA entitlement/limit/allowance »

Raising the maximum ISA limits from £7200 to £10200 will encourage investment and saving.

→ See also CASH ISA(Cf. ↑cash ISA), EQUITY ISA(Cf. ↑equity ISA)