3 Ways to Ensure That You Maximise Your Cash ISA Allowance for Greater Savings Potential

  • Added:
    Dec 21, 2013
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Trying to figure out how to maximise your cash ISA (Individual Saving Account) allowance should take place at the beginning of the year, rather than waiting until the last minute. This is particularly true for individuals who do not have easily accessible lump sums of cash at their disposal at any given time. If you want to get the most out of this type of savings strategy, then you need to learn how to optimise the opportunities it provides.

As you know, your cash ISA allowance is regulated by certain rules that specify exactly how much you can put into this type of savings account over the course of a single year. As long as you follow these guidelines and the suggestions included here, you should be able to maximise your profits quite nicely.

Maximise Your Full Cash ISA Allowance Each Year

Perhaps the most important reason to maximise on the amount of money that you contribute each year is the fact that you'll end up with more money at the end of the tax year. It's only logical that the more you put into it, the larger the sum of cash you accumulate will be.

One of the other reasons that you should try to put in the full tax allowance is that you don't have to worry about paying taxes on your contributions. Unlike a regular savings account, all of the interest that you earn is tax-free, so you get to keep all of it. Again, the more you put into it, the greater your savings will be.

Since your returns are tax-free, it makes sense to put in as much as you can afford up to your full limit. For tax year 2013/2014, UK investors can place as much as £5,760 into their accounts. Of course, the amount for a junior account is less, and it is valued at £3,720. You should always use your full cash ISA allowance because you can't rollover any unused amounts to the next year's account. Take advantage of full tax allowance by putting in whatever you can afford whenever you can.

You should make sure that you get your money to work for you by putting it in as early in the year as possible. The earlier that you deposit your money, the sooner it will begin earning interest for you. If you wait until two months before the end of the tax year, your money is only going to earn interest during those two months. However, if you put it into the account during the first month, your money will earn interest for the full twelve months. If you are looking to earn money, then it only makes good sense to start as early as you can.

Start Now and Watch Your Money Grow

If you haven't yet started to save by opening a cash ISA, it isn't too late. You can begin whenever you like, but the sooner you start, the better your chances are to realise your full allowance. Plus, you don't need to have access to a lot of money when you first begin to save. In fact, it is easy to get started, since you can open an account with a single pound. Yes, just one pound will provide access to an ISA of your own. So, if you start now with one pound and continue to deposit additional sums of cash, you will be able to watch your money grow now instead of waiting to accumulate a large sum to open up an account.

Top Off Regularly and Reach Your Full Cash Allowance Sooner

If you haven't already been doing so, it is important to top off your cash ISA regularly if you want to have hopes of maximizing on your allowance. You should simply develop a regular habit of putting money into the account as regularly as you can. Don't set your goal too high or you will experience disappointment far too often. Instead, create small, realistic goals that can help you to reach your larger goal of putting in the full allowable amount of  £5,760 for 2013/2014.

If you are having difficulty getting yourself to make regular deposits to top off your account, why not consider setting up a standing order from your regular account? You simply select the amount that you want to transfer from your regular account to your cash ISA account and set it up so that the transfer repeats itself every month.

Author's Profile

Sam Jones the author of this article recommends to his readers lookin for the best cash isa allowance deals to visit the uSwitch.com comparison website.


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