Compare Halifax ISAs

Who are Halifax?

Halifax were originally founded in Yorkshire in 1853 as a building society. By 1997 they were a FTSE 100 company, and today operate as a trading division of Bank of Scotland since being taken over in 2009.

Halifax offer a wide range of banking services to retail customers, including bank accounts, savings and investment accounts (including ISAs), credit cards, loans, home insurance products, and mortgages.

They offer several different ISA accounts, including Cash ISAs and Stocks and Shares ISAs, and we will explain the pros and cons of each type available.

What is an ISA account?

An ISA account is a savings or investment account that is completely immune from UK taxes.

You can contribute up to £20,000 to ISAs in the current tax year, and your annual allowance refreshes each year.

What are the tax benefits of an ISA?

In a regular savings account, you could be required to pay income tax on the interest your savings generate.

In a regular investment account, you could be required to pay income tax on the dividends that your investments produce and capital gains tax on the growth of your holdings.

In a Cash ISA or Stocks and Shares ISA, your savings and investments are completely sheltered from these forms of tax.

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 what they invest in.

They have the same ISA rules regarding contribution limits, tax benefits and transfer rules, but their risks and returns can vary greatly.

Cash ISA features:

• Your investment cannot go down in value
• Fixed-term Cash ISAs provide guaranteed rates of interest
• The longer your fixed term, the higher interest rates you get
• Withdrawing before the end of a fixed-term incurs charges or voids your interest
• Easy-access or instant-access Cash ISAs provide lower, variable rates of interest
• Withdrawing from a variable rate Cash ISA usually incurs no charges
• Interest rates are currently low in the UK, meaning the potential returns are very limited

Stocks and Shares ISA features:

• Stocks and Shares ISAs allow you to invest directly in the stock market
• You can pick your own funds and shares to invest in
• Or, you can invest in a managed portfolio put together by investment professionals (often referred to as an Investment ISA)
• The potential for high returns is much greater, but the value of your holdings can go down as well as up
• You pay an ongoing charge to your ISA provider and any fund managers controlling your investments
• You may also pay dealing charges for purchasing your investments
• You can usually withdraw at any time, but you will need to sell your holdings first

What type of ISA do Halifax offer?

Halifax offer both Cash ISA and Stocks and Shares ISA products.

Their Stocks and Shares ISAs come in two forms: an Investment ISA and a Share Dealing ISA.

Halifax Share Dealing ISA:

1. Build your own ISA portfolio of shares and funds
2. £9.50 per trade
3. £36 provider annual management charge
4. Wide range of funds, shares and ETFs available to choose from

Halifax Investment ISA:

1. Choose from one of Halifax’s ready-made funds to invest in
2. Options vary based on the funds’ risk levels
3. Benefit from a diversified investment and professional fund management
4. Higher charges: an annual service fee of 0.24%
5. Ongoing fund charge applies on top of this

The best Halifax ISA for you depends on how much control you want over your investments. If you are an experienced investor and want to pick your own shares, the Share Dealing ISA might be suitable for you.

However, if you’re a beginner and prefer to leave day to day investment decisions to professionals, Halifax's Investment ISA might be more appropriate.

Halifax also offer two types of Cash ISA - fixed and variable rate accounts:

• The fixed-rate ISA locks your money away for a number of years and you are charged for withdrawing
• The variable-rate ISA gives you the flexibility of withdrawals, but your interest rates are much lower

How do I open a Halifax ISA?

You can open a Halifax ISA account online, and you’ll need to make a contribution to start your account.

There are three ways you can start investing:

1. With a lump sum via a debit card payment
2. With a regular contribution via direct debit
3. By transferring your existing ISAs to a Halifax ISA

How do I transfer my existing ISA into a Halifax ISA?

You can transfer any existing ISAs you hold, either Cash ISAs or Stocks and Shares ISAs, into a Halifax ISA by following these steps:

1. Complete Halifax’s ISA transfer form
2. Send your signed form to Halifax
3. Halifax will carry out your transfer for you and notify you when complete

Using this transfer method ensures your ISA transfer does not count as a contribution towards your annual ISA allowance. This means you can transfer as many ISAs as you want in the same tax year.

Remember - if you withdraw the funds from your existing ISA and then add them to a Halifax ISA, your money will lose its ISA status. This results in your new contribution being deducted from your ISA allowance, so make sure you complete an ISA transfer form as detailed above instead.