Tax Exempt Special Savings Account (TESSA)

Updated: Aug 20, 2021

A UK system, intended to encourage small savers, by which individuals could invest a limited amount each year with a building society, the interest being tax-free. This system has now been closed to new investors, being replaced by Individual Savings Accounts (ISAs), but the capital part of maturing TESSAs can be reinvested in an ISA which does not count against an individual’s permitted annual total.

Reference: Oxford Press Dictonary of Economics, 5th edt.

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