Which is the Best ISA to Invest In?
Investment ISAs are becoming a popular choice to counteract the low interest rates offered by banks. More and more providers are making it very simple for people to begin investing by offering clear charges, ready-made portfolios and even managed accounts.
Two types of investment ISA:
Innovative Finance ISA - These ISAs involve peer to peer lending. You effectively act like a bank, people borrow money off you and pay it back over a period of time with interest. The idea is that you can get much higher interest rates than with a Cash ISA but without the risk of a Stocks and Shares ISA. The main risks include borrowers defaulting on their payments. This can be avoided by spreading your loan over a high number of borrowers. As this ISA is still relatively new, there are a few providers but this market is expanding rapidly.
Stocks and Shares ISA – These ISAs can (and traditionally do) offer higher returns than a Cash ISA. Customers can invest in the stock market as well as gilts, bonds and propert. The tax-free wrapper makes it an attrative way to invest.
Picking the right account for you can be daunting if you’re new to investing so we’ve highlighted some of the best accounts for you below.
Best for Fund Choice:
Hargreaves Lansdowne Investment ISA offers over 2,500 funds and a lot of advice in the form of newsletters and articles. If you need to learn more about investing, their website is a great place to start.
Features:You can access your money at any time24/7 access to your account with online bankingInvest with a financially secure, FTSE 100 companyOpen your ISA with a lump sum from £100, or start a monthly direct debit from just £25 per monthTop up your account in just a few minutes with a debit cardHargreaves Lansdown offer two types of Socks and Shares ISA:
Ready-made ISA: this account offers a simpler way to invest. This account allows you to choose from six pre-built portfolios which allow you to choose your investment goal and level of risk. It’s perfect for people who are new to investing, currently lack the confidence to choose their own funds or simply don’t have time to research potential investments.
With this account, your portfolio is regularly rebalanced to increase performance.
Do-it-yourself ISA: this option allows you to invest in over 2,500 funds with no charge when you buy and sell funds. You will be able to choose from shares listed on the UK, US, Canadian and European stock markets.
Best for Accessibility:
Axa also offer a wide range of domestic and international funds but with an easy to navigate portfolio and descriptions on each fund page, Axa also makes it easy for people new to investing.
Axa is also one of the cheapest options.
Features:Invest from as little as £50 per month or a lump sum of £500 or moreEarn a variable rate of interest on any cash held in your ISA while you decide where to investTake control of your own investments through our online serviceUK based customer support team 24/7 access to your account online or using their app
Best High Street Bank
ISAs can help you grow your investments faster over time. This is because you won’t be taxed on any returns you make on your investments within an ISA. With the Lloyds Investment ISA you can:Choose between their three managed funds to invest all or part of your annual ISA allowance: lower, medium, or higher risk and potential returnStart investing from £100 a month, or if you are looking to invest an initial lump sum the minimum is £2,000. Alternatively, you can do both.Transfer money in from an existing cash or stocks and shares ISA and preserve the tax efficient status as long as you follow the correct procedureUse Internet Banking to monitor your Investment ISA’s performance, top up your investment, set up regular investments, or switch your money between their three managed fundsYou can sell all or part of your investment at any time and we won’t charge you a fee for doing so
Here are just some of the great options on offer within the Investment ISA market. There are many others to consider. Please check our tables for comparisons and latest rates.