There are two main type of ISA, (1) a cash ISA, which works like a regular savings account and (2) a stocks and shares ISA, which allows you to invest in funds, bonds and individual company’s shares. There are also Innovative Finance ISAs, which allow people to receive tax-free interest and capital gains on funds lent through peer-to-peer lending platforms, and Help to Buy or Lifetime ISAs, which are specifically for saving for a first home or retirement.