Types
of ISA
In creating the ISA scheme, certain standards
were set down by the Government for ISA Managers to follow.
Also known as the “CAT standards”, this requires
ISA Managers to have reasonable Charges, easy Access and
fair Terms.
Although these standards apply to ISAs in general,
the actual terms and conditions of your ISA depends on
the particular
ISA you are looking into. In other words, the CAT standards
are recognised as a general guideline, but not as a specific
form of guarantee. ISA standards will depend on what is most
suitable for that type of ISA.
•
Cash ISA Standards
| Charges |
No regular or one-time
charges. Replacement fees are allowed. |
| Access |
Minimum transactions
of less than £10. Withdrawals possible within seven working
days notice |
| Terms |
Interest rate payable
should not be more than 2 points lower than the Bank
of England base rate. Any increases need to reflect monthly
changes to the base rate.
Any decrease in the
rate of interest may be slower, and no other conditions
should apply to the ISA (i.e. restrictions on how often
money may be withdrawn from the account.) |
•
Stocks & Shares ISA Standards
| Charges |
No opening
charges more than 1% of the ISA’s annual net
asset value.
No other charges payable by the person
who owns
the account. |
| Access |
Small amounts possible
for deposits (£500 for lump sums, or a minimum
of £50 for regular monthly deposits) |
| Terms |
Investments limited
to authorised investment and trust units, or open-ended
investment companies.
A minimum of 50% of the investment
should be in ISA-qualifying offerings listed on the
European Union stock market.
All units and shares
should have the same selling and buying price.
The risk involved in this kind of
investment should be specially noted on any accompanying
informational
or marketing literature. |
• Life Insurance ISA Standards
| Charges |
No opening
charges more than 3% of the ISA’s annual net
asset value.
No other charges payable by the person
who owns the account. |
| Access |
A monthly minimum premium
no greater than £25, or no more than £250
for a lump sum. |
| Terms |
The policy’s
surrender value should reflect the underlying value
of the fund’s assets over time.
There should be
no penalties for surrendering the policy.
The policy’s
surrender value after 3 years must return at least
the value of the premium paid. |
The standards outlined above should serve only
as a guide. Additional charges may apply
depending on
the specific
services involved. Also consider the holding
of stocks and shares
within the ISA to fairly evaluate whether
the ISA will be able to
meet your particular needs.
|
