Stocks and Shares ISA
A Stocks and Shares ISA is becoming a popular alternative to Cash ISAs now that the interest rates offered by banks are at the lowest they’ve ever been.
Generally, the returns on your investment are much higher in a Stocks and Shares ISA but there is an element of risk and there’s no guarantee that you won’t make losses or even withdraw less than you invested.
However, there are some way to minimise risk if you’re worried about investing:
- Many providers now offer ready-made risk assessed portfolios, you can choose the risk level that you’re comfortable with
- Many accounts mange your funds for you so you don’t have to
- Investing in government bonds and property are less risky than investing in the stock market
While there are no guarantees of returns with investment, these are some sure ways to minimise that risk.
How do Stocks and Shares ISAs work?
You are able to invest anything up to the tax threshold for that year and choose to have it spread across a Cash, Stocks and Shares and Innovative Finance ISA or consolidated within one account.
A Stocks and Shares ISA is a tax-efficient way to invest. Despite the name, you can invest in many things besides Stocks and Shares, all with varying levels of risk.
As well as shares you can also invest in:Investment trustsOpen Ended Investment Companies (OEICs)Unit trustsGovernment bonds (Gilts)Corporate bonds
A Stocks and Shares ISA can be a good way to put aside some money each month or invest some extra cash. This kind of account not advised if you don’t have any other savings or are in debt because you won’t be able to access your money easily if you need to and you could make losses.
Choosing an investment ISA
Making sure you shop around ISA providers before committing to a product is sensible, as you can only open one new ISA of each type each tax year. It may be possible to transfer accounts, however, this could incur charges and leave you with less than you started.
When looking for an investment ISA you may want to consider things such as minimum investment charges and the range of products it allows you to invest in.
Use the tables on this website to compare a selection of different types of ISA from a selection of providers. Follow the links to find out more and apply.
Transferring your ISA
It has become much easier to transfer your ISA, whether that is in to a Stocks and Shares ISA or simply switching Cash ISAs. Changing ISA providers can take around 30 days if it involves a Stocks and Shares ISA or around 7 days if you’re simply switching Cash ISA providers.
You are able to move your Stocks and Shares ISA in to a Cash ISA relatively easily, simply fill in the transfer form that your new provider will provide and give details of your assets and they will take charge of selling and transferring them.
While the process simply involves filling in a form, be careful of penalty charges from your current provider, which could apply.