Best ISA Funds

What is an ISA

An ISA is an individual savings account that offers the chance for individuals to earn up to £20,000 tax-free interest.

Not only can those who subscribe to an ISA benefit from tax-free interest from savings, but also enjoy the freedom to invest from their ISA and avoid paying tax on their returns.

ISA funds

ISA funds, also known as stocks and shares ISAs, enable individuals to invest their money into “qualifying investments”.

The following are deemed “qualifying investments”:

1. Cash
2. Trusts
3. Investment trusts
4. Stock market shares
5. Government investment and savings bonds

Unlike other ISAs, such as cash ISAs, the capital in ISA funds will often have restricted accessibility. This means that you will likely have to wait a certain amount of time before you can withdraw money from your ISA funds.

Why use ISA funds

If it is done correctly, investing your capital can provide additional income, can help you grow your savings for a purchase or enable you to save effectively for retirement.

However, it should be noted that any return from an investment is subject to tax. The obligation to pay tax on any investment dividend could significantly reduce your overall return.

ISA funds can give you the chance to make an investment and avoid paying any tax on its return. This is because you can earn up to £20,000 tax-free interest through ISAs, which may help you grow your capital substantially over the course of the year.

Eligibility

To qualify for ISA funds you need to be:

1. Aged 18 years or over
2. A UK resident and tax payer