Share Dealing ISAs
With a Share Dealing ISA you can take control of your investments in the stock market and protect any profits you make from income tax or capital gains tax charges.
You can use your Share Dealing ISA to invest in stocks and shares, bonds, gilts, equities, investment funds, investment trusts and exchange traded funds, thereby offering maximum flexibility and control over your investments - ideal for the investor who wants to manage their own funds.
Choosing a share dealing ISA provider
Every share dealing ISA provider offers something different, so it's well worth doing some background reading before investing. The provider you choose will depend on your personal investment goals, attitude to risk, and the level of control you want to have over your funds.
If your priority is flexibility, some share dealing ISA providers offer…
- Online, phone or mobile app trading, so you can keep track of your investments wherever you are.
- No inactivity penalties, so you can leave your investments untouched without incurring any charges.
- A wide range of investment options to help you create a balanced portfolio and assess risk.
- Both UK and international deals, allowing you to access a broader range of potential investment opportunities.
- Share price alerts to help you stay on top of the market easily.
- A nominee account which allows you to manage your investments all in one place while your ISA provider takes care of the administration.
- Trading tools and access to research. Providers such as Barclays provide sophisticated trading tools including Level 1 and Level 2 access (additional fees may apply). Providers such as IG provide a demo account facility where you can practice trading and get used to the platform capabilities.
- As well as ISA accounts most providers offer Self Invested Personal Pensions (SIPPs) which can compliment ISA saving. Check with different providers for their charging structures which can vary.
- Something else to look out for is whether the provider will pay interest on cash. While you decide on which investment are right for you knowing you are getting interest on any cash balance is a bonus. This is a feature offered by Barclays.
If your priority is value for money, some share dealing ISA providers offer…
- Low or non-existent set-up fees.
- Low administration charges.
- Low minimum monthly investments.
- A quote-finding service to help you get the best price for your shares on the market.
- Discounts for frequent traders - for example, your individual dealing fee may be reduced if you complete a certain number of share transactions per month. So, if you make 10 or more deals in one month, you might receive a discount on each deal you make the following month.
- Discounts for regular investors - you may be offered a discount on dealing fees, provided that you regularly invest a certain amount each month.
Most providers tend to offer a mixture of the above benefits, so it's worth researching your options.
5 things to look out for when picking a share dealing platform for your ISA
- While trading fees is often the first thing you might look at - cheapest is not always best. Make sure the platform provider offer the services you require.
- Platform functionality is improving all the time - Companies such as Barclays and IG provide extensive resources to help you make investment choices.
- If you want to invest in funds check the providers charging structure - this can vary significantly from one provider to the next. Fidelity and Hargreaves Lansdown have an extensive range of funds where they have negotiated fund discounts for their investors. Charles Stanley platform has a low 0.25 per cent annual charge on fund holdings, or 0.15 per cent above £500,000. If you only want funds and don't need access to individual shares consider AXA Self Investor.
- If you want to invest in ETFs or more sophisticated products in addition to your ISA then platforms like IG provide clients with tools for trading in forex, spreadbetting and CFDs. IG do not provide access to funds.
- Do plenty of research before choosing a home for your money.
Why invest using an ISA
The current ISA allowance is £20,000 which means for a couple you can invest a whopping £40,000 into an ISA which will be sheltered from tax. Under current legislation that means you will not pay any income tax on interest or capital gains tax on any realised gains when money is taken out the ISA.
Using a share dealing ISA or self select isa as they are often called provides investors with a lot of control - recent platform developments give investors the tools to be fully informed before they make investment decisions. Utilising your annual ISA allowance makes a lot of sense in maximizing your returns.