Coming from the US, an ISA is a financial product that’s kind of
baffled me since I’ve been here. However, various assignments have meant
that I've had to learn about it, so I’ve taken the time to read over
exactly what it is, and I think I understand it fully. ISA stands for
‘Individual Savings Account’ and allows you tax free savings throughout
the year. For that reason, they’ve often got a much better gross income on
your savings than most of the savings accounts out there.
As of next year you can put a total of £7200 in an ISA, and up to £3600 of this allowance can be in cash, while the rest can be made up from stocks and share options. The two parts are separated and can be taken out with different providers if you want to. This is a pretty cool new feature of the new ISA rules that are coming in next year. It means that you can take out a high interest cash ISA with someone like Icesave, who offer 6.1 % (variable) AER, and then shop around for the best stocks and shares or index tracking ISAs out there. I had a look at ISAs from Alliance and Leicester and they’ve got plenty of different products to suit long term investors, with products that track many of the world’s share markets and indexes.
I think these are pretty good ways to save, and they’ve got definite advantages over savings accounts because you don’t pay tax. I also like the way that they can provide a sort of introduction into the stock market, which seems to baffle most people who don’t work in finance. In the long term, I particularly like the idea of stocks, because they normally outperform cash. Take a look at investments from Legal and General to see more about investment tracking funds. Otherwise, I recommend reading Benjamin Graham’s The Intelligent Investor, or looking it up on Wikipedia.
As of next year you can put a total of £7200 in an ISA, and up to £3600 of this allowance can be in cash, while the rest can be made up from stocks and share options. The two parts are separated and can be taken out with different providers if you want to. This is a pretty cool new feature of the new ISA rules that are coming in next year. It means that you can take out a high interest cash ISA with someone like Icesave, who offer 6.1 % (variable) AER, and then shop around for the best stocks and shares or index tracking ISAs out there. I had a look at ISAs from Alliance and Leicester and they’ve got plenty of different products to suit long term investors, with products that track many of the world’s share markets and indexes.
I think these are pretty good ways to save, and they’ve got definite advantages over savings accounts because you don’t pay tax. I also like the way that they can provide a sort of introduction into the stock market, which seems to baffle most people who don’t work in finance. In the long term, I particularly like the idea of stocks, because they normally outperform cash. Take a look at investments from Legal and General to see more about investment tracking funds. Otherwise, I recommend reading Benjamin Graham’s The Intelligent Investor, or looking it up on Wikipedia.
