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Sep 2020

Investment ISA for Beginners

Investment ISA for Beginners

The world of investments can be a bit overwhelming, especially for a first-time investor. So – to make your first dive into investing your hard-earned cash that little bit easier, we’ve put together a beginners guide for investment ISAs, giving you all you need to know. 

When you’re looking to open an Investment ISA, there is quite a lot of different options out there – it can be a bit much to get through when you’re a first-time investor.

What is an Investment ISA?

An Investment ISA is also known as a Stocks and Shares ISA. This is a type of ISA which allows your to invest your money into stocks, shares and funds without paying tax on the returns, due to it’s tax-free ISA wrapper.

You can invest up to £20,000 every tax year into any ISA account – so if you were lucky enough to have that much cash to spare, you could pop this all into one Investment ISA account, or spread it between different types of ISAs (but you can only open one Investment ISA per year).

Generally, stocks and shares ISAs tend to generate higher returns than Cash ISA accounts, so if you’re looking to grow your money this is probably the best choice.

Which one should I choose?

There are a considerable number of different kinds of investment ISAs, including:

  1. Index tracker ISA
  2. Fund Supermarket ISA
  3. High Income ISA
  4. Ethical ISAs
  5. ETF ISA
  6. Gold ISA
  7. Monthly Income ISA
  8. Share Dealing ISAs
  9. Self Select ISA
  10. Structured Growth ISA

For a first time investor, however, we would recommend steering clear of the more complicated and higher-risk form of investments such as High Income ISAs, Monthly Income ISAs, Share Dealing ISAs, Self Select ISAs, Gold ISAs, and Structured Growth ISAs.

Ideally, you would be wanting to choose an account which has a fund manager, so that you’re not picking and choosing investments yourself. This will incur a fee, but it means that you’re able to gain experience in investing, and then you might later venture out into a more independent investing position.

So, for a first time investor, we would lean more towards opening a simple Investment ISA, an Index Tracker ISA, a Fund Supermarket or – for a more socially or environmentally conscious investor – an Ethical ISA.

How many can I have?

You can theoretically have as many Investment ISAs as you want – as long as you do not open more than one per year.

The current limit on ISA accounts is legislated by the Government; you can only open one ISA each tax year which runs from April 6th to April 5th each year. So you can have as many Investmnt ISAs as you want – just as long as you only open one each tax year.

Where can I open an Investment ISA?

You can open an Invest ISA through the various platform websites.

Some might have the capability to open these online, via phone, in person at a brick-and-mortar base, and even in the case of some challenger banks, in a mobile app.

Our directory of each type of ISA page has a list of providers with their latest rates, so have a look through each of those pages to find the right one for you. 

Important Risk Information:

The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website aims to provide information to help you make your own informed decisions. It does not provide personal advice based on your circumstances. If you are unsure of how suitable an investment is for you, please seek personal advice.

Lifetime ISAs

Save for your first home and retirement

Compare Lifetime ISAs

Junior ISAs

Invest for your child’s future

Compare Junior ISAs: 

Stocks & Shares ISAs

Invest tax-free in stocks and shares 

Compare Stocks and Shares ISAs:

Latest News

5 Considerations for Your Next Investment ISA

15th March 2021

You've decided to invest your savings into a Stocks and Shares ISA. You'll be using your tax-free ISA allowance for this year before the deadline, while also investing your money for your future. But what do you need to consider before opening an account? We've put together a list of our top five considerations for you to think about before you click "apply". 

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