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Moneyextra.com Dictionary
TESSA-only Individual Savings Account TOISA
TESSAs and PEPs were replaced with ISAs by Gordon Brown in April 1999. Thereafter no new TESSAs were available but investors were allowed the option of contributing to existing TESSAs until their final maturity date. The very last TESSAs matured in April 2004. Following maturity the tax-efficient status of TESSA savings could be maintained through the use of a TESSA-only Individual Savings Account TOISA. Investors were allowed to reinvest TESSA capital in a TOISA within 6 months of maturity. Any accrued interest or bonuses had to be taken or invested elsewhere. The TOISA did what it says on the label. It provides an ISA wrapper only for maturing TESSA capital. Investors were not allowed to invest any other funds in it and any investment into a TOISA did not impact on other ISA limits. Nearly all of the TOISAs that were made available operated on the same basis as cash ISAs. The level of interest rate available varied from institution to institution and was mainly variable although for those willing to limit the availability of their savings the rates on offer for notice or fixed rate accounts were of course more attractive. There was also a small number of equity-linked TOISAs on the market that may or may not offer a much better rate of return over the longer term. These equity-linked TOISAs tended to be medium-term investments for a set time period usually five years.. Any attempt at early withdrawal is likely to run into penalties. See also Moneyextra.coms Savings & Investments Centre Moneyextra.coms ISA Supplement ©Moneyextra.com Moneyextra.com recommends you take independent financial advice before acting on any article 2009-02-17 00:00:00 © Moneyextra.com