What is the difference between an ISA and a regular savings account?

An ISA, or Individual Savings Account, differs from a regular savings account in a few key ways. Firstly, an ISA allows individuals to save a specific amount of money tax-free each year, up to a certain limit set by the government. This means that any interest earned on the funds saved within the ISA is not subject to income tax. Conversely, regular savings accounts may be subject to tax on the interest earned. Additionally, ISAs offer various types, such as cash ISAs and stocks and shares ISAs, which allow individuals to choose the investment strategy that suits their needs. Regular savings accounts, on the other hand, typically offer a fixed or variable interest rate and may have fewer investment options. Ultimately, the main difference lies in the tax advantages and investment choices offered by ISAs compared to regular savings accounts.