Savings

Cash ISA

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A simple, tax-free way to save

Cash ISA - rates from 1.30% AER (1.29% tax-free) to 2.00% AER (1.98% tax-free) variable depending on your balance.

It's important to save for the future - and whether you’re saving towards a particular goal or purchase, our Cash ISA, which pays from 1.30% AER (1.29% tax-free) variable for balances as little as £1, right up to 2.00% AER (1.98% tax-free) variable for balances of £40,000 or more, could be a firm step in the right direction. You can start saving from £1, you earn tax-free interest, and you get instant access to your money whenever you like. And it's so simple, you can complete your ISA application online.

  • tax free interest
  • interest is calculated daily and applied monthly
  • instant access by a transfer to another first direct account
  • transfers from other providers allowed
  • apply and manage online, by post or by telephone.

A brief introduction to ISAs

A cash ISA is a way of saving or investing without paying tax on your earnings, since all income and capital gains arising within an ISA are exempt from any personal liability to UK income tax and capital gains tax. A payment by you into an ISA in any tax year is called a subscription. The overall ISA subscription limit in the current Tax Year is £11,880 for anyone eligible to invest in an ISA. Up to £5,940 of this overall limit can be saved in a cash ISA with one provider. See How much can I save? for more information on subscriptions limits.

ISA ALLOWANCE CHANGE

On 19 March 2014, the government announced an increase to the ISA allowance effective from 1 July 2014. The revised ISA limit of £15,000 for the 2014/15 tax year can be fully subscribed to a cash ISA, or stocks and shares ISA, or a combination of the two. Up until 1 July 2014, the current ISA limit and the rules on how you split your overall ISA allowance between a cash ISA and stocks and shares ISA remain in place. Also with effect from 1 July 2014, you will be able to transfer a stocks and shares ISA to a cash ISA.

There are two types of ISA - a stocks and shares ISA, and a cash ISA. We offer both, but you can only take out one of each per year.

All ISA providers are required to report details of ISA subscriptions made by their customers to HM Revenue & Customs (HMRC) so that HMRC can check that individuals do not exceed the limits.

ISAs may be transferred to another ISA with the same or a different ISA provider (note - not all cash ISAs accept transfers in and some providers may impose a charge for transferring an ISA out). When an ISA is transferred in this way, any amount transferred from previous years' allowances are not classed as subscriptions and therefore do not count towards the subscription limits explained above. Previous years allowances do not need to be transferred in full, they may be split between different providers. Any amount being transferred from the current tax year, however must be transferred as a whole and will count towards your current year subscription allowance. You may transfer a cash ISA to a stocks and shares ISA, however it is not possible to transfer a stocks and shares ISA to a cash ISA.

That means you can transfer any ISA balances to us, held with other providers, from previous or current tax years. (Transfers from existing first direct cash ISAs to another first direct cash ISA with a fixed rate are not permitted.)

If you already have a Cash ISA, but haven't subscribed to it in the last tax year (6 April 2013 - 5 April 2014), you won't be able to subscribe in the current tax year (6 April 2014 - 5 April 2015). To reactivate your ISA and make further subscriptions, please download the Cash ISA reactivation form .

The value of investments (and any income received from them) can fall as well as rise and you may not get back what you invested. For some investments this can happen as a result of exchange rate fluctuations as shares and funds may have an exposure to overseas markets.

You should plan to invest over the medium to long term, at least five years as a minimum.

 

Cash ISA at a glance

Our Cash ISA lets you enjoy tax-free growth and instant access to your money if you need it. This information will give you a better idea of what's involved - though please make sure you read the Interest Rates and Charges and
Terms and Conditions before you apply.

Our downloads are in a PDF format. To read them you'll need to have Adobe Reader 4.0™ or above. It's free and you can get Adobe Reader here.

 

Cash ISA rates

Rates are variable

Balance AER Tax free
£1 - £4,999 1.30% 1.29%
£5,000 - £9,999 1.50% 1.49%
£10,000 - £19,999 1.70% 1.69%
£20,000 - £39,999 1.85% 1.83%
£40,000 and over 2.00% 1.98%

 

Summary box and Key Product Information
Account Name

Cash ISA.

Interest rates

Tiered interest rates on balances above £1.

Interest calculated daily and applied monthly.

see our interest rates and charges information for full details

Tax status

ISAs are free from personal liability to any UK Income Tax and Capital Gains Tax.

Conditions for bonus payment

No bonus payments on this account.

Withdrawal Arrangements

Charge free instant withdrawals can be made by transfer to another first direct account in your name, over the phone or via Internet Banking. Transfers to other banks may take longer.

Access

The account can be applied for online or by post and can be managed online, by post or by telephone.

 

Other things you should know

 

How much can I save?

Because of their tax advantages ISAs are subject to annual subscription limits. The overall ISA subscription limit in the current Tax Year is £11,880 for anyone eligible to invest in an ISA. Up to £5,940 of this overall limit can be saved in a cash ISA with one provider. The remainder of the £11,880 can be invested in a stocks and shares ISA with either the same or another provider. Alternatively, the full £11,880 can be invested in a stocks and shares ISA with one provider.

However, once you've paid in £5,940 into a Cash ISA, you can't make additional Cash ISA deposits - even if the Cash ISA balance is below £5,940 because you've made a withdrawal. If you have fully subscribed your tax-free allowance in a tax year, any amount withdrawn cannot be reinvested until the following Tax Year.

ISA ALLOWANCE CHANGE

On 19 March 2014, the government announced an increase to the ISA allowance effective from 1 July 2014. The revised ISA limit of £15,000 for the 2014/15 tax year can be fully subscribed to a cash ISA, or stocks and shares ISA, or a combination of the two. Up until 1 July 2014, the current ISA limit and the rules on how you split your overall ISA allowance between a cash ISA and stocks and shares ISA remain in place. Also with effect from 1 July 2014, you will be able to transfer a stocks and shares ISA to a cash ISA.


You can also transfer any ISA balances to us, held with other providers, from previous or current tax years. (Transfers from existing first direct cash ISAs to another first direct cash ISA with a fixed rate are not permitted). There are no maximum limits on the amount that can be transferred to our cash ISA from another cash ISA held with another provider.

You can only subscribe to one cash ISA in a tax year. Any subscription made to a cash ISA will reduce the remaining overall ISA allowance that can be subscribed to a stocks and shares ISA in the same tax year.

How to manage my account

The account application details can be completed online or via a paper application but, once it's open, you can manage your account online, by telephone or by post.

How to apply

To apply for a Cash ISA you must already hold a first direct current account - our 1st Account. If you already have a 1st Account, you can open a Cash ISA online, by telephone or by post.

What else should I know?

You need to be over 18 and a UK resident.

Definitions

AER stands for Annual Equivalent Rate. This shows you what the gross rate would be if interest were paid and compounded each year.

Gross is the interest rate before the deduction of tax applicable to interest on savings accounts.

Tax-free free from personal liability to any UK Income Tax and Capital Gains Tax.

 

The value of the tax benefits described depends on individual circumstances. The tax treatment of ISAs could change in the future.

 

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How to apply for a Cash ISA

Already a customer?

You can apply online through your Internet Banking. As you're currently logged in, just select Apply online from the left hand menu within Internet Banking

Log on to apply

Once you've logged on to Internet Banking, just select 'Apply', and choose 'Cash ISA' from the left hand menu.

If you haven't yet registered for Internet Banking, simply click on the link below and follow the on-screen instructions.

Please note: You will need to have registered for telephone banking before you can access Internet Banking. You can do this by calling us on 08 456 100 100.

Register for Internet Banking

Or to apply over the telephone call us on:
08 456 100 100

You can request an application to open a Cash ISA for the current Tax Year over the telephone.

Not yet a customer?

To open a Cash ISA you will also need to open a first direct 1st Account, our current account.

Learn more about the 1st Account

You can also talk to us anytime on:
0800 24 24 24

Protecting your money

Your eligible deposits with HSBC Bank plc are protected up to a total of £85,000 by the Financial Services Compensation Scheme, the UK's deposit protection scheme. This limit is applied to the total of any deposits you have with HSBC Bank plc and first direct.

Any total deposits you hold above the £85,000 limit between HSBC and first direct are not covered.

 

 

 

 

 

Our downloads are in a PDF format. To read them you'll need to have Adobe Reader 4.0™ or above. It's free and you can get Adobe Reader here.