Compare NFU ISAs

Who are NFU Mutual?

NFU Mutual are an insurance and financial services company operating in the UK.

The company’s full name is The National Farmers Union Mutual Insurance Society Limited, and it was formed by seven farmers back in 1910.

Whereas banks are owned by their shareholders, NFU are owned by their policyholders as they are a Mutual society.

Some of the products they offer to their customers include:

1. Home and Motor Insurance
2. Farming and Agricultural Insurance
3. Business Insurance
4. Financial Advice
5. Pensions, Savings and Investment Accounts (including Stocks and Shares ISAs)

What is an ISA account?

An ISA is a type of investment account that shelters your savings and investments from UK tax.

HMRC allows UK individuals to invest up to £20,000 into ISAs in the current tax year, and your ISA allowance refreshes each year so you can keep topping up.

There are two main types of ISA accounts: Cash ISAs and Stocks and Shares ISAs.

What is a Cash ISA?

Cash ISAs generate interest on your cash savings like normal savings accounts do, but all the interest you earn is 100% tax-free.

There are two main categories of Cash ISAs: fixed-rate and variable-rate.

Fixed-rate Cash ISAs:

1. You are locked into a fixed term of 1 to 5 years
2. Your interest rate is guaranteed for the duration of this term
3. You could lose your interest or be charged if you withdraw money before the end of your term
4. Interest rates are generally higher the longer the term you commit to

Variable-rate Cash ISAs:

1. You are not locked into a fixed term
2. You can usually withdraw as and when you please with no charge
3. You usually get lower rates of interest than fixed rates, and your interest can fluctuate

Since the financial crash in the late 2000s, interest rates in the UK have been sitting at record lows, so the potential for growth and returns through Cash ISAs is very limited compared to Stocks and Shares ISAs.

However, with a Cash ISA, you are guaranteed to get back at least what you originally invest, provided that you don’t make withdrawals before the end of a fixed-term you’ve committed to.

What is a Stocks and Shares ISA?

Stocks and Shares ISAs are tax-free investment accounts, through which you can invest directly in the stock market.

You can invest in shares, funds, ETFs, investment trust, and many other investment vehicles that you can pick for yourself.

Alternatively, you can invest in a ready-made ISA portfolio managed and controlled by investment professionals who make the daily investment decisions for you.

The potential for greater returns is much higher in a Stocks and Shares ISA compared to a Cash ISA. However, your investments can both fall as well as rise in value and you may get back less than you originally invest.

You should be aware of the risks involved before investing.

What type of ISA account is an NFU ISA?

NFU Mutual provide investors with Stocks and Shares ISA accounts but don’t offer a Cash ISA.

They manage a range of investment funds themselves, and their ISA accounts allow you to pick which funds to invest in yourself.

In an NFU Mutual Stocks and Shares ISA, the dividends you receive from your investments are completely free of UK income tax.

Also, the growth of your investments over time will not be subject to Capital Gains Tax when you come to sell them, so you never need to worry about paying tax on your profits.

What are the charges for an NFU Stocks and Shares ISA?

NFU Mutual apply a range of charges to your Stocks and Shares ISA that can change over time based on servicing costs, fund management costs and industry regulation.

Here are the two main types of charges you can expect to pay for an NFU ISA:

• Ongoing Fund Charges (the fund manager’s charges for the fund or funds you invest in)
• Investment Service Charge (this is an ongoing charge taken by NFU for administrating your ISA account)

Can I withdraw from an NFU ISA?

You can withdraw at any time from an NFU ISA. However, to keep your account open you must leave a balance of at least £1,000 in your ISA account.

You can also set up regular withdrawals from your ISA should you wish to take a regular income from your ISA savings.

How do I open an NFU ISA?

To open an NFU ISA, you’ll need to speak to NFU’s non-advised telephone service team who will help you set up your account.

They cannot advise you on what ISA product to take out or which funds to pick, so you’ll need to make these investment decisions yourself.

Once your account us established you can start contributing up to £20,000 in the current tax year. You can do this either with a lump sum payment or by setting up a regular direct debit contribution.