Maxi ISAs - What Is A Maxi ISA & How Does It Work?

So what is a maxi ISA exactly? Well first of all there are two types of ISA (which stands for individual savings account) and they are a mini ISA and a maxi ISA. A mini cash ISA is like a tax free savings account with a deposit limit of £3000 per year. A maxi ISA is an investment plan which is tax free and which will let you invest up to £7000 per annum and you can put all of this investment into shares, unit trusts and investment trusts or you can have some of it invested in cash, insurance plus stocks and shares if you want.

You should be aware that you can only invest in one mini ISA or one maxi ISA per year and you absolutely must adhere to this rule as otherwise the inland revenue will close the second ISA you open (regardless of whether it performs better than the second one or not) and you would lose the tax breaks that you enjoyed on the interest you earned. There are management charges with maxi ISAs but if you chose a cash mini ISA instead there would be no charges as this operates like a tax free savings account in effect.