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MONEY COMMENT
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In the olden days before everyone started talking about Cash ISAs, there was a precursor to the tax-free savings account. Remember TESSAs? The acronym stands for Tax Exempt Special Savings Account and it stopped in April 1999 when ISAs were introduced. However, as it was a five-year savings vehicle, there are still plenty of them around. If you're no stranger to TESSAs, you'll know that you could save a limited amount each year in a tax-free savings account, as long as your contributions were locked in for five years. The maximum you could save over the five-year period was £9,000 in capital and, if you're still paying into your existing TESSA then you'll be aware that you can still do so until it matures - five years from the date of starting it. However, if your TESSA is nearing maturity, please remember that there's a time limit on your decision-making. Don't be vague about the maturity date because once you hit it, you've only got six months to take steps to sort it out. If you fail to act your money will automatically be switched to an ordinary savings account which is likely to pay pathetic amounts of interest not to mention the fact that it'll start to be taxed! If you want to continue to protect your savings from tax you can transfer the capital into a special TESSA-Only ISA (TOISA) which will pay interest free of tax. You're only allowed to transfer the capital; that is, up to the maximum of £9,000. It doesn't include the interest you have accrued throughout the term of the TESSA. Owning a TESSA or a TOISA does not affect your entitlement to open an ISA so, in effect, you're allowed to run two tax-protected vehicles alongside each other. More: Savings Centre | ISA Centre
As with Cash ISAs, you need to monitor the interest rate because TESSA and TOISA providers are just as liable to sneakily reduce the rates as they do with Cash ISAs. You can easily transfer them to better-paying providers as long as you ensure you get the new provider to transfer the money for you. (You'll lose the tax benefits if you withdraw the money yourself).