Already on ArticleSlash?

Forgot your password? Sign Up

Cash ISA vs. Stocks and Shares ISA

 


Visitors: 2,938
 2 votes

Comparing ISA rates can be confusing and a little bit overwhelming at times. There are so many options to choose from and all of them offer very competitive rates. The trick to getting the best value for your money is to understand what each Individual Savings Account is all about and then see what the providers have to offer. There are two major types of ISAs – Cash ISAs and Stocks and Shares ISAs. Both of them offer tax-free income and other tax benefits common to all ISAs, but there is a limit to number of accounts and the amount of money that you can place in an ISA.

Cash ISAs

Cash ISAs are much like a current account or a regular bank account. Aside from being tax-free, you can get higher interest rates from ISAs. ISA rates may vary depending on the subcategory. Mini-ISAs are savings accounts where you can withdraw your money at any time. Interest rates for this type of ISA do not remain steady and may fluctuate from time to time. This is why you should be careful not to get drawn in by promotional rates that last for only a short period of time. If you want to be on the safer side, fixed-rate ISAs are a good investment. There is a lock-in period which could range from 3-5 years wherein you need to pay a fee or a penalty if you wish to withdraw from or remove your investment entirely. Interest rates remain steady and you can get good value for your money with this kind of ISA.

Stocks and Shares ISAs

While Cash ISAs are a bit conservative, Stocks and Shares ISAs are for people who don’t mind taking risks for higher profits. You can place your money in a wide range of investment options. Corporate and government bonds, unit trusts and other options are available. Like in regular stock market and bond investments, the risks are higher, so it is advisable to consult a stock broker or financial adviser to choose where to place your money. Like other types of ISAs, your earnings are also tax-free, combined with the possibility of higher ISA rates and earnings makes for a really enticing offer.

Once you have decided which kind of ISA to invest in, you should take the time to research and compare the offers prepared by the providers. The highest rates may not be the best ISA rates in the long run.

(436)

Article Source:


 
Rate this Article: 
 
Borrowing To Invest In Stocks And Shares - A Risky Tactic?
Rated 2.5 / 5
based on 2 votes
ArticleSlash

Related Articles:

Stocks And Shares Trading - How A Grandma Makes Money Trading Stocks And Shares

by: Peter Lim (May 13, 2007) 
(Finance)

Stocks and Shares ISA

by: Gilbert Stockton (September 21, 2008) 
(Investing/Stocks)

Stocks and Shares ISAs - 5 Things You Need to Know

by: Julien Jest (January 12, 2009) 
(Investing/Stocks)

Renting Shares - Is it Possible to Rent Out Stocks?

by: Banjo Smyth (October 15, 2008) 
(Investing/Stocks)

Buy Shares & Stocks - Trading in India

by: Tom Decruz (April 21, 2008) 
(Investing/Stocks)

Money in stocks and shares gets you better returns

by: Suresh Dinakaran (November 15, 2010) 
(Finance/Personal Finance)

An Industry Blueprint To Stocks And Shares

by: Nigal Thom (October 04, 2011) 
(Finance)

How Princess Diana Collectibles Could Be a Better Bet Than Stocks and Shares!

by: Jim S Hanson (August 11, 2008) 
(Home and Family/Crafts Hobbies)

Stocks and Shares - Tips For Investing Wisely

by: Mike Drabble (September 04, 2008) 
(Investing/Stocks)

Borrowing To Invest In Stocks And Shares - A Risky Tactic?

by: Tosif Patel (January 10, 2007) 
(Finance)