Individual savings accounts or ISAs are a savings account form where you do not have to pay taxes on interest earned up to saving £5,760 in the account. Cash ISAs are similar to basic savings accounts, except you can enjoy tax-free benefits with the ISA compared to a standard savings account. While many financial institutions offer cash ISA, two major accounts are Barclays Instant Cash account and Lloyds Bank Cash ISA saver. If you are considering these accounts as your ISA of choice, use these comparison factors to help you make your decision.
Interest Rates
Because your savings account is a means for you to gain extra income on the money you save, you naturally want to obtain the highest rate possible -- providing the bank does not make excess restrictions on the funds. Both accounts do not limit the amount of money you can contribute to the savings account. Remember, however, that contributions in excess of £5,760 will be subject to tax on the interest earned.
The Barclays account offers a tiered system for interest based on how much money you have in your savings account. For example, if you have between £1 and £14,999 in your account, you will earn a 1.29 percent annual equivalent rate (AER). If you invest between £15,000 and £29,999, you will earn an AER of 1.39 percent. If you have a balance of £30,000 or more, you will earn a 1.49 percent AER. These rates are variable, meaning they are subject to change with inflation rates. The rate could potentially decrease or could increase, depending upon the rates the Bank of England and/or the Barclays set.
Lloyds Bank does not tier its interest rates offered. Instead, it offers a 1.00 percent AER on balances of £5,000 or more. This rate is a variable rate, so it is subject to change. However, Lloyds does offer an introductory fixed bonus rate for the first year you have the account. The introductory bonus is for 0.50 percent. This means for the first year you have your account, you will earn interest at a rate of 1.50 percent.
At current rates, you will earn more interest from Lloyds Bank the first year you have your savings account -- providing you can put £5,000 in it. But after the first year, the Barclays account is the better deal in terms of interest rates.
Initial Deposit
Both the Lloyds Bank and Barclays accounts require an initial deposit of £1 to open the account. Also, the accounts are cash-access ones. This means that if you need to withdraw funds from the account, you can do so immediately. This differs from fixed rate bond savings accounts where your money must remain untouched for a certain duration for you to gain the interest on the account.
Application Ease
You can apply for the Lloyds savings account online, by phone or in-branch. If you apply by phone, the business hours are Monday through Friday from 7 a.m. to 10 p.m. and Saturday through Sunday from 8 a.m. to 6 p.m. If you choose to apply online, Lloyds claims the application process will take around five minutes.
If you with to apply for the Barclays account online or by phone, you must already be a Barclays current account customer. This does not mean you cannot qualify for the savings account if you are not a current account customer. However, you will have to apply in-person at a Barclays branch to establish your new account.
Once your application has been accepted and you have transferred your funds to your new account, both Lloyds Bank and the Barclays allow you to view and manage your savings account online. However, with the Barclays account, you will have to set up your initial portions in-person.
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Interest Rates
Because your savings account is a means for you to gain extra income on the money you save, you naturally want to obtain the highest rate possible -- providing the bank does not make excess restrictions on the funds. Both accounts do not limit the amount of money you can contribute to the savings account. Remember, however, that contributions in excess of £5,760 will be subject to tax on the interest earned.
The Barclays account offers a tiered system for interest based on how much money you have in your savings account. For example, if you have between £1 and £14,999 in your account, you will earn a 1.29 percent annual equivalent rate (AER). If you invest between £15,000 and £29,999, you will earn an AER of 1.39 percent. If you have a balance of £30,000 or more, you will earn a 1.49 percent AER. These rates are variable, meaning they are subject to change with inflation rates. The rate could potentially decrease or could increase, depending upon the rates the Bank of England and/or the Barclays set.
Lloyds Bank does not tier its interest rates offered. Instead, it offers a 1.00 percent AER on balances of £5,000 or more. This rate is a variable rate, so it is subject to change. However, Lloyds does offer an introductory fixed bonus rate for the first year you have the account. The introductory bonus is for 0.50 percent. This means for the first year you have your account, you will earn interest at a rate of 1.50 percent.
At current rates, you will earn more interest from Lloyds Bank the first year you have your savings account -- providing you can put £5,000 in it. But after the first year, the Barclays account is the better deal in terms of interest rates.
Initial Deposit
Both the Lloyds Bank and Barclays accounts require an initial deposit of £1 to open the account. Also, the accounts are cash-access ones. This means that if you need to withdraw funds from the account, you can do so immediately. This differs from fixed rate bond savings accounts where your money must remain untouched for a certain duration for you to gain the interest on the account.
Application Ease
You can apply for the Lloyds savings account online, by phone or in-branch. If you apply by phone, the business hours are Monday through Friday from 7 a.m. to 10 p.m. and Saturday through Sunday from 8 a.m. to 6 p.m. If you choose to apply online, Lloyds claims the application process will take around five minutes.
If you with to apply for the Barclays account online or by phone, you must already be a Barclays current account customer. This does not mean you cannot qualify for the savings account if you are not a current account customer. However, you will have to apply in-person at a Barclays branch to establish your new account.
Once your application has been accepted and you have transferred your funds to your new account, both Lloyds Bank and the Barclays allow you to view and manage your savings account online. However, with the Barclays account, you will have to set up your initial portions in-person.
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