The description ‘portfolio ISA’ appears in your table of Best Buy Variable ISAs when discussing the Charter Savings Bank's account. But what does it mean?
Portfolio ISAs offer an interesting feature, that is relatively uncommon in the cash ISA market and is referred to by a variety of terms and names – including Umbrella ISAs, OptimISAs and so on.
How this particular feature works is that ordinarily you can only subscribe new money into one cash ISA per tax year, but a small group of providers will allow you to open several types of cash ISA with them in the same tax year. For example, if you wanted to pay into a Help to Buy ISA, normally you would be unable to use the remainder of your cash ISA allowance. However, some providers will also let you open, for example, an easy access cash ISA in addition.
Similarly, you could open a mix of a provider’s variable rate and fixed rate cash ISAs in the same tax year. Basically, the Portfolio ISA feature gives you the option to have a mix of different types of cash ISA, rather than having to decide between one or the other at the outset.
This is also valuable if you deposit less than the full allowance into a cash ISA, which then closes and does not allow any further subscriptions – this is a common situation with fixed rate cash ISAs. If the provider offers the Portfolio ISA feature and you want to use more of your ISA allowance at a later date within the same tax year, you could open another cash ISA with them, without falling foul of the ISA rules.
It is important to note that the majority of savings providers will NOT allow this, so check carefully before proceeding if you intend to make use of this feature.
Examples of providers that offer Portfolio ISAs include Charter Savings Bank, Newcastle Building Society, Aldermore, Ford Money, Nationwide Building Society and Post Office’s online ISA.
If you need anymore information on ISAs please download our free ISA Guide ‘Navigating the ISA maze’ or call us on 0800 011 9705, we are always happy to help.