It is designed to encourage saving by providing individuals with the opportunity to earn interest on their savings or invest in various financial products, while enjoying tax efficiency.
For example, let's say you open a Cash ISA. You can deposit up to a certain annual limit, currently £20,000, into this account without having to pay income tax on the interest earned.
If you save £10,000 in a Cash ISA and earn £400 in interest over a year, you get to keep the full amount without any tax deductions.
Join over 500,000+ people building wealth with Chip.