Probably the best-known example of tax-free savings is the cash Individual Savings Account (ISA). This device allows you to earn interest without being taxed on it, providing a very potent way of getting your money to make money. However, ISAs will only let you invest £3,000 during any one tax year, so the ability to make huge sums tax-free in a short space of time does not exist.
But ISAs remain a useful way to store some money and to build up your savings over a period of time, as while the interest rates may not look initially attractive, they can often prove far better than taxable savings accounts once the tax is taken into account. Further, laws exist which insist that anyone with an ISA must be able to get hold of their money within seven days of requesting it, making the accounts far more accessible than notice accounts.
Another option to avoid the Treasury getting its hands on any of your savings is to invest it in an offshore savings account. However, this approach runs the risk of getting caught out by an unscrupulous rogue firm, because offshore firms are not regulated and are not covered by the UK's Financial Services Compensation Scheme. This means that investing in offshore accounts should only be done after considerable and extensive research into this area.
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