What Is an ISA bond?

The Sovereign Bond Fund ISA

We have various types of ISA’s which have been designed to show noticeable returns for our customers. We believe in taking a calculated and proactive approach in saving, which helps you make more from your investments.

What is an ISA?

It’s a savings or investment account you never pay tax on, it’s as simple as that. You can save up to a maximum of £20,000 per year (for 2019/20), and this can be in a cash ISA – including a Help to Buy ISA – a stocks & shares ISA, an innovative finance ISA, a Lifetime ISA or a mixture of all of them.

How much can you put in an ISA?

Each tax year, you get an ISA allowance which sets the maximum you can save within the tax-free wrapper from April to April. For the current tax year this is £20,000. You can choose whether you want to split this between stocks & shares ISAs, cash ISAs (including Help to Buy ISAs), innovative finance ISAs and Lifetime ISAs, and how you do so. Yet do note, you can only put £4,000 in the Lifetime ISA every year, which means you could put the remaining £16,000 into any of the other options.

What types of ISA are there?

There are five main types of ISA – cash ISAs, Help to Buy ISAs, innovative finance ISAs, stocks & shares ISAs and Lifetime ISAs.

Your ISA Options

Splitting ISA Allowance?

Use the maximum allowance for cash or investing. You can put all the £20,000 in a cash ISA. Or invest the whole lot in an investment ISA. Or put it all in an innovative finance ISA.


Mix ‘n’ match. Split the allowance between cash, stocks & shares, Lifetime or innovative finance ISAs. You get to choose!

If you wanted to, you could invest £5,000 in a cash ISA, £10,000 in a stocks & shares ISA and £5,000 in an innovative finance ISA. Or split it another way. The only rule is that, combined, your tax-free ISA savings in the 2019/20 tax year don’t exceed £20,000.



  • You must save or invest by 5 April – the end of the tax year – for it to count for that year. Crucially, any unused allowance doesn’t roll over – so if you don’t use it, you lose it – forever. You’ll get a new allowance the next tax year, but won’t be able to contribute anything to the old ISA.
  • Any savings or investments which stay within the tax-free ISA wrapper will continue to earn interest and reap the tax benefits until you withdraw the money.
  • it’s possible to have substantial amounts invested tax-free: £7,000 a year from 1999 to 2008, £7,200 a year until 2010, £10,200 for 2010/11, £10,680 in 2011/12, £11,280 for 2012/13, £11,520 for 2013/14, £15,000 for 2014/15, £15,240 for 2015/16, £15,240 for 2016/17, £20,000 for 2017/18 and 2018/19, plus the gains (interest or investment returns) made each year.

Help with ISA

Cash ISAs Explained

Use a standard instant access savings account, and if you’ve large amounts of savings, you’ll have to pay tax on the interest. Basic-rate taxpayers have to give 20% of the interest above their £1,000 personal savings allowance earned straight to the Government. For higher-rate taxpayers, it’s 40% above their £500 personal savings allowance. And for additional-rate taxpayers, it’s 45% on all savings interest – there’s no personal savings allowance available for additional-rate taxpayers.


With a cash ISA, there’s NEVER tax to pay on interest.

Cash ISAs are simply savings accounts where the interest is NEVER taxed. And any interest you earn doesn’t count towards your personal savings allowance, so if you’ll earn a lot of interest, you can protect more of it in an ISA.


Just like normal savings accounts, there are a variety of cash ISAs available, including instant access, regular savers and fixed-rate deals. You don’t have to pay to open a cash ISA. For details of the best payers, read Top Cash ISAs.

Download Brochure

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