Compare Barclays ISAs

Who are Barclays Bank?

Barclays are one of the largest international banks in the world. Headquartered in the UK, they are listed as a public company on the FTSE 100 and also have a listing on the New York Stock Exchange.

Their history can be traced back to 1690, although they didn't acquire their Barclays name until 1736 when James Barclay became a partner of the bank.

Today, they offer a wide range of financial services to UK customers including loans, mortgages, bank accounts, insurance products and savings accounts.

They offer two types of ISA accounts for tax-efficient investing: Cash ISAs and Stocks and Shares ISAs.

What is an ISA account?

ISA accounts are a type of tax-efficient savings account in the UK.

They are just like regular savings or investment accounts, but your investments are 100% free from tax.

There are two types of tax you normally pay on your investments:

1. Income Tax
2. Capital Gains Tax

Income tax is usually paid on the interest you earn in a cash savings account and dividends you receive from stock investments.

Capital gains tax is usually paid on any profit you’ve made on stock investments when you come to sell them.

In order to limit these tax benefits, HMRC only allows you to invest up to £20,000 per year in ISAs.

Your ISA allowance refreshes each tax year, so you can keep topping up your accounts over multiple years to make the most out of your tax-efficient savings.

What’s the difference between a Cash ISA and a Stocks and Shares ISA?

The main difference between Cash ISAs and Stocks and Shares ISAs is the assets they invest in.

Cash ISAs always keep your money as cash, meaning they can’t go down in value and you earn interest on your balance.

Stocks and Shares ISAs invest your money into the stock market. You can benefit from growth and dividends, but your investments can fall as well as rise in value.

Here are some of the key features of each account to give you an idea of the pros and cons:

Cash ISA Key Features:

1. Your investment cannot fall in value
2. You earn fixed or variable interest rates on your savings
3. Fixed interest rates are higher, but require you to hold your investment for a fixed term of 1 to 5 years
4. If you withdraw or close your ISA account during a fixed term you will be charged or lose some of your interest
5. Variable interest rates are lower and can fluctuate, but you have more access for withdrawals

Stocks and Shares ISA Key Features:

1. You can invest in a range of stocks within your ISA account, including shares, funds, ETFs and Bonds
2. You can create a Stocks and Shares ISA portfolio yourself by choosing your own investments, or invest in a ready-made portfolio created and managed by professionals
3. You will be charged an Annual Management Charge (AMC) by your Stocks and Shares ISA provider
4. You can usually withdraw at any time, but you’ll have to sell your investments first which can take up to a week

What type of Cash ISA does Barclays offer?

Barclays Cash ISAs vary based on two main factors:

• The rate of interest and whether it is fixed or variable
• The flexibility for withdrawals

Generally, the more access you have to your Barclays Cash ISA for withdrawals, the lower the interest rate you’ll get.

For a fixed-rate ISA, the longer the fixed term you commit to, the higher your interest rates will be.

What type of Stocks and Shares ISA does Barclays provide?

You can invest in a Barclays Stocks and Shares ISA in two different ways:

• Self-select ISA portfolio
• Ready-made ISA portfolio

Here are some of the key pros and cons to each type of ISA investment strategy:

Barclays ready-made ISA:

1. Invest in a ready-made ISA portfolio put together and controlled by Barclays’ investment managers
2. Choose a portfolio based on how comfortable you are with investment risk
3. Options range from cautious and defensive to adventurous and higher risk portfolios
4. Your portfolio is instantly diversified and is monitored and controlled by professionals
5. You usually pay higher charges for a managed portfolio compared to if you pick investments yourself

Barclays self-select ISA:

1. Create your own portfolio by picking the funds and shares you want to invest in
2. Best for more experienced and confident investors
3. You pay ongoing charges for some investments but won’t be paying a portfolio manager
4. You’ll be responsible for diversifying your portfolio and managing its risk level

How can I open a Barclays ISA account?

The easiest way to open a Barclays ISA is online, and there are three ways to start investing:

1. Top up with a debit card
2. Contribute regularly via direct debit
3. Transfer an existing ISA

Barclays ISA transfers

You can transfer in your existing ISAs to a Barclays Cash or Stocks and Shares ISA by following the below checklist:

1. Check with your existing ISA provider if you will be charged for transferring out
2. Complete an ISA transfer form with Barclays
3. Barclays will administrate your ISA transfer on your behalf

If you complete your ISA transfer through the above steps, your ISA transfer won’t count towards your ISA allowance.

This means you can transfer as many ISAs as you want in one tax year while still contributing £20,000 of new money.

Note: if you just withdraw your existing ISA and add it to a new ISA, you will use up your ISA allowance when you add it back in. This means you’ll be limited to £20,000. Make sure you use an ISA transfer form to transfer your ISA instead.