What type of savings account allows the holder to receive interest without being charged income tax?

The type of savings account that allows the holder to receive interest without being charged income tax is the Individual Savings Account (ISA). An ISA is a government-approved tax-free savings account available in the UK that can hold cash, stocks, and shares. The primary benefit of an ISA is that any interest earned, or gains made, are free from income tax and capital gains tax, making it an attractive option for individuals looking to save or invest.

Standard Savings Accounts, High-Interest Savings Accounts, and Fixed Deposit Accounts generally do not share this tax-free advantage, as the interest earned from these accounts is usually subject to income tax based on the individual's tax rate and personal allowance. Therefore, ISAs stand out as a favorable choice for those wanting to grow their savings without the burden of tax on the interest earned.