5 ISA Ideas To Invest £100 PM
If you’ve got a spare £100 each month, why not invest it for your future? Investment ISAs are great ways to build a financial portfolio without worrying about paying high rates on your returns, as the ISAs offer a £20,000 annual tax-free allowance.
With so many Investment ISAs to choose between, knowing which is right for your needs is no easy feat. We’ve made things simple for you by hand-picking five fantastic ISAs that will maximise your spare cash.
Disclaimer: Investment ISAs put your capital at risk & you may get back less than you originally invested. When making investment decisions, remember to consider your financial goals and make sure you understand the risks associated with each ISA.
Investment ISAs put your capital at risk & you may get back less than you originally invested
- Fund Choice: Invest in UK, US and international shares & funds
- Invest From: £25 pm
Good to know: An award-winning ISA that gives you complete control. The second largest platform in the UK with the widest choice of investment options in the market including funds, investment trusts, ETF’s and more. Open online in less than 10 minutes. Access to expert independent ideas and analysis. Low cost fees and trading. Capital at risk. *Offer ends 5th April. Terms & fees apply. New customers only
- Fund Choice: Invest in Shepherds Friendly With Profits Fund
- Invest From: £30 pm
Good to know: You don’t have to make any tricky investment decisions; your money will be invested in Shepherds With Profits Fund, and the bonuses you could receive will depend on the future performance of the fund. To try to achieve higher returns for you, your money is invested in a variety of assets, the majority of which consist of stocks and shares, but also property, bonds and cash. While returns are not guaranteed in stocks and shares investments and the value can go down as well as up, Shepherds apply a process known as ‘smoothing’ that attempts to even out fluctuations in the value and aims to keep a consistent level of bonus payments. Capital at risk.
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- Fund Choice: Invest in Exchange Traded Funds (ETFs)
- Invest From: £100
Good to know: Make the most of the world’s best ETFs commission free. Build your own portfolio commission free or leave it to our experts for just 0.25%. Zero‑ISA fees. Choice of 700+ ETFs. Low cost, diversified, index-tracking of stock markets, bonds and commodities. DIY or Managed. ETF costs apply. Capital at Risk. *When you invest at least £100 with InvestEngine (Capital at risk, Ts&Cs apply). ** Customers who transfer an existing ISA, or open and fund a new account could earn a bonus of up to £4,000 on top of their partner welcome bonus! Ts&Cs apply
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- Fund Choice: Invest in UK, US and international shares & funds
- Invest From: £25 pm
Good to know: Invest in over 2,000 funds, shares and more across 25 markets. Invest from £25 per month. Which? Recommended Provider for Investment Platforms 2024. Low-cost online dealing from £1.50. Open your account in minutes from app or website, manage your portfolio on the move. FSCS protected. Capital at risk
Which ISA is best for you?
|
Provider |
Key Features |
Best For |
|---|---|---|
|
Interactive Investor |
– Award-winning platform |
Investors who want access to a variety of investment options, and control over their money. |
|
Shepherds |
– Smoothing process to reduce fluctuations |
Low risk investments for beginners. Those looking for a managed investment experience. |
|
Best Invest |
– Pick-your-own or Ready-Made Portfolios |
Beginners or cost-conscious investors seeking flexibility and low fees. |
|
InvestEngine |
– Commission-free DIY investing |
ETF-focused investors worried about costs, or people looking for diversified portfolio options. |
|
AJ Bell |
– Low-cost online dealing |
Investors seeking a simple, low-cost, and highly reputable platform. |
Investing £100 pm In A Stocks & Shares ISA
Unlike a cash ISA—which is a straightforward tax-free savings account—a stocks and shares ISA allows you to invest up to a certain amount without paying tax. The ISA maximum allowance runs from 6 April each year. Check the main page to see the current allowance.
Options for using your Stocks and Shares ISA allowance
With a wide range of options available, you can make the most of your allowance and tailor each investment to suit your immediate financial needs and future goals.
Invest your full allowance
You can invest your full allowance in a stocks and shares ISA, which is currently £20,000 for 2024/25. Opting for this route is a tax-efficient strategy for expanding your investments, as your capital gains, dividends, and returns aren’t subject to tax.
These ISAs are also easy to manage and can be beneficial for new ISA investors as the portfolio is relatively simple.
Choose from a variety of investment types
You can also use the ISA allowance for a diverse portfolio with several investments. These include:
- Shares: Buy shares of companies through the stock exchange (excluding shares traded on the Alternative Investment Market – AIM).
- Unit Trusts and Investment Trusts: Team up with other investors to create a professionally managed portfolio of bonds, stocks and other securities.
- Open-Ended Investment Companies: OEICs are similar to unit trusts in many ways, but they have a different structure and can give you a diverse portfolio.
- Life Insurance: Some ISAs allow investment in life insurance policies, which can be a part of a long-term wealth planning strategy.
- Corporate Bonds: Lend money to companies through corporate bonds and earn interest as a return.
- Gilts: When you invest in government bonds (gilts), you can enjoy reliable ROIs, as they’re a lower-risk option.
Top 10 things to consider when choosing a stocks and shares ISA:
- You should be prepared to invest for the medium to long term with a stocks and shares ISA – for example, for five years or more.
- If you think you might require access to your cash in the next couple of years, a stocks and shares ISA may not be the right choice for you. Share prices can be very variable – especially in the current financial climate – and so if you were to withdraw your investment in the next twelve to eighteen months, you could end up with less money than you started with.
- Different stocks and shares ISAs have different investment options. These range from £50 per month (e.g. through a fund) to a specified minimum investment (e.g. £1,000).
- Some ISA providers will give you online access to your account, allowing you to see the investment performance of your ISA and keep up to date with any charges incurred.
- If your stocks and shares ISA aren’t performing as well as you’d like, you can usually transfer it to another provider. To do this, speak to your new ISA manager, who will arrange the transfer, allowing you to avoid losing any tax benefits by withdrawing your cash.
- You can transfer shares you get from an HMRC-approved SAYE (save as you earn) scheme run by your employer or a share incentive plan into a stocks and shares component of an ISA without incurring capital gains tax up to your annual ISA allowance.
- You will not be able to transfer any existing non-ISA shares or shares you’ve inherited into stocks and shares ISA.
- With a stocks and shares ISA, there is greater long-term growth potential than a cash ISA – however, bear in mind that the value of your investment can go down as well as up.
- If you have a stocks and shares ISA from a previous tax year, you’re permitted to move this into a current Stocks and Shares ISA or split it between two or more ISAs.
Ready to invest in a stocks and shares ISA?
A stocks and shares ISA, as with all investments, involves an element of risk, so it’s important that you’re in a sufficiently stable financial position. So, before you take the plunge and open your ISA account, make sure that:
- Your Debts Are Under Control: You’ve either paid them off or have affordable arrangements in place to do so. If not, it might be worth using the extra £100 to deal with your debts, then invest at a later date.
- You have Emergency Savings: Do you have finances in place when something unexpected occurs? For example, if your car breaks down or you’re made redundant, you’ll need savings that you can use straight away.
- You Understand Investment ISAs: If you’re very new to saving, you may find that a Cash ISA is better for you at this stage. Once you’ve built up some accessible savings in this way, you can then consider a stocks and shares ISA.
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Frequently Asked Questions
How do I open an ETF ISA?
You can open an ETF ISA online, via your mobile app, on the phone, or via a posted form. You can contribute with a debit card or via Direct Debit. Once you’ve committed your funds, you can then purchase your ETF investments.
How do I open a Stocks and Shares ISA?
You can open a Stocks and Shares ISA online or via the provider’s mobile app. You can also open one over the telephone or with a posted application form.
How much money can I put into a Self Select ISA?
The annual ISA allowance is £20,000. This is the amount you can contribute to Stocks and Shares ISAs and Cash ISAs combined.
How much money can I put in a Stocks and Shares ISA?
You can add £20,000 for the current tax year, which refreshes each tax year.
Is an Investment ISA platform a good idea?
An Investment ISA is a good idea as long as you understand the risks involved and are comfortable making your investment decisions. You could lose money on your investments, but they could also significantly outperform other ISA investment options.
Are there any fees for managing a Stocks and Shares ISA?
Many providers charge fees for managing your Stocks and Shares ISA, including fund management, trading and annual account fees. That’s why it’s so important to compare ISA providers carefully and ensure you find one with competitive management fees.
Can I withdraw money from a Stocks and Shares ISA?
Yes, it’s possible to withdraw a small amount or a lump sum from your account, but there are some things to keep in mind. Firstly, the ISA provider might have a maximum withdrawal rate, and many charge withdrawal fees.
When you withdraw money from the account, you’ll lose that portion of your allowance for the same tax year.
What happens to my ISA if the market goes down?
When the market goes down, your own investments might decrease – but it depends on the type of Stocks and Shares you’ve invested in. Investment ISAs always come with risks, but many choose them due to the potential returns and dividend income.
Only invest money you have spare to prevent getting into debt and remember to maintain a separate savings account for emergency expenses.
How long do Stocks and Shares ISAs last?
While many Cash ISAs can be beneficial for short-term savings, Stocks and Shares ISAs are best for long-term goals. Investing the money for five years or longer lets you maximise your potential returns and navigate through short-term market changes.
Ultimately, the ISA you choose depends on your individual circumstances and whether you’re planning for the future or looking for a short-term savings solution.