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>So an ISA (instant savers account) is basically a place to put your money to save it and they all have different interest rates which give you returns for your money?
Yes. Think of the ISA as a tax-free wrapper for your savings. The wrapper can contain any kind of savings account, from an instant-access savings account to a stocks and shares investment. As long as the money stays in the ISA, you don't pay any tax on the interest you earn. Lots of different ISAs are available and there are advantages and disadvantages to each. See Moneysavingexpert for more information on the kinds of ISAs available and the rates of interest paid.
>The longer you agree to keep your money in there and the more you put in the higher your returns, right?
Some ISAs do offer higher interest rates if you agree to deposit for a certain length of time, but there are usually penalties for early withdrawal. Some ISAs are instant-access with no bonuses or penalties. Others allow you to invest in shares.
>How whacky is it to suggest myself getting an account in which I can withdraw money almost instantly that keeps up with inflation?
Perfectly sensible. As mentioned in >>5595, having some instant-access savings is very important, because it can stop you from getting into debt if you have money troubles. Once you have a few months of living expenses in savings, you should look at investing in a pension.
>What about starting two ISA accounts?
Potentially a good idea. You could keep a grand or two in an instant-access account in case of emergencies, and the rest in a deposit account that pays a higher rate of interest.
>I was just wondering if there were any major differences [in current accounts] for small fry money people like me?
Not a huge amount, because interest rates are so low at the moment. The best bank account depends on whether you're always in credit and how much your normal balance is. TSB pay 5% on balances up to £2000, which is better than any ISA.