This type of stocks and shares ISA means that an ISA provider will manage your investment and at a risk that you choose. It normally costs a bit more for these services but you’ll have advisers on hand to help.
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A stocks and shares ISA - which is also known as an investment ISA and equity ISA - is a tax-efficient way to invest. They let you put your money into different investments with the bonus of tax-free returns. Therefore, it acts like a ‘wrapper’ as it’s the vehicle that helps you to invest.
However, there are risks involved and it’s important not to get this confused with a cash ISA, as that’s a tax free savings account.
The main difference between a stocks and shares ISA and a cash ISA is that instead of putting your money into a savings account you use your money to buy and sell shares in companies. You won't pay tax on the profits you earn and the investments held in a stocks and shares ISA.
There is a limit to how much money you can invest in a stocks and shares ISA - for this tax year it's £20,000."
A stocks and shares ISA works well if you have long-term savings goals, like a retirement fund, as you might get better returns than a cash ISA.
However, remember your capital is at risk as with any investment, the value could easily fall as it can rise so the profit is never guaranteed.
We’ve compiled the best stocks and shares ISAs deals currently on the market so you can see which provider might best suit your needs.
If you are saving for the short term then a normal savings account or a cash ISA would be more suitable than a stocks and shares ISA.
However, if you do have long-term saving plans, then a stocks and shares ISA would work well compared to other types of investing. As well as the tax-free element you also get some extra protection from the fact it’s an ISA, which could be helpful.
That being said, if you would like a tax-free alternative take a look at a lifetime ISA as this is also tax free and has good interest rates and a 25% bonus from the government. Take note that this ISA does come with restrictions and you only get the bonus if you use the money to buy your first house or after you turn 60.
If you aren't sure which ISA to choose, a chat with a financial adviser should help."
Source: Defaqto. Updated: December 9, 2022
Past performance is not indicative of future results
This type of stocks and shares ISA means that an ISA provider will manage your investment and at a risk that you choose. It normally costs a bit more for these services but you’ll have advisers on hand to help.
If you are feeling confident about investing, then this is a good option to take control. A self-selected stocks and shares ISA means that you pick the investments yourself.
This type of stocks and shares ISA means that an ISA provider will manage your investment and at a risk that you choose. It normally costs a bit more for these services but you’ll have advisers on hand to help.
If you are feeling confident about investing, then this is a good option to take control. A self-selected stocks and shares ISA means that you pick the investments yourself.
Stocks and shares ISAs offer some choice if you are keen to invest. For example, you can invest in the following assets:
Government or corporate bonds
Investment trusts
Unit trusts
Individual stocks and shares
Open Ended Investment Companies (OEICs)
Exchange-traded funds (ETFs)
We know that the best deals are always changing, so the editorial team at Uswitch regularly checks the rates on this page and updates them at least fortnightly. To find the best deals we compare products by taking various factors into consideration, like the interest rate (AER), the balance needed to get the highest interest rate, minimum initial deposit, withdrawal conditions and the term of the account as applicable. These factors change subject to the category.
We use this system for the whole of the market covering nearly all, so you can get an overview of what the banks and credit unions are typically offering in the UK. All the banks featured are FSCS protected, so you can be reassured that your money is safe, provided it’s within the defined limits and regulations. To find out more about how FSCS looks after your money, visit fscs.org.uk.
Most ISAs are covered by the FSCS so that means up to £85,000 per person, per institution is covered if your provider goes bust. It’s important to note that this doesn’t cover you if the investments lose value in the stock market.
Yes, you can have a stocks and shares ISA and a cash ISA if you wish. You just need to split the £20,000 between the ISAs.
Yes, if your ISA allows transfers then it would be fine, but there might be charges to do this.
If you are considering a stocks and shares ISA then it’s important to think long-term. This means at least five years, as the market can go up and down and you are more likely to lose money if you invest for a shorter period of time.
Below you can find a list of our pages about different savings accounts :