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Stocks & Shares ISAs versus Cash ISAs

Which is the best type of ISA for you?

Cash ISAs are simply tax-free savings accounts. You receive interest on your savings at the rate the bank offers. While there is minimal risk that you will lose the cash saved in such an account, with interest rates as low as they are currently, your money’s spending power could be eaten away by inflation over time.

But with a Stocks & Shares ISA you can hold a range of different investments including unit trusts, open-ended investment companies (OEICs), investment trusts, ETFs and single company shares. Simply put, you are able to take control of where your money is being invested and can do this in line with your own risk appetite. There is the potential to receive greater returns than you might get in a cash ISA.

The risks and rewards of Stocks & Shares ISAs

Rather than being offered a rate of interest (and sometimes having to hold your cash in an account for a set amount of time to achieve this rate), stocks and shares rise and fall in value depending on where they are invested. This means you have the potential to get back less than you invested subject to when you need access to your money.

Over the longer term, Stocks & Shares ISAs can deliver much higher returns than Cash ISA investments.

But although not guaranteed, over the longer term Stocks & Shares ISAs can deliver tangibly higher returns than cash ISA investments. You are also able to sell investments and keep the cash in your account without losing your ISA benefits as long as you are holding the cash with the intention of investing in the future.

Want to invest in our Stocks & Shares ISA?



Past performance is not a reliable indicator of future returns

The value of your investment can go down as well as up, and you can get back less than you originally invested.

The Bestinvest Online Investment Service, including any account analysis and investment reports provided by our guidance services, is an online execution-only dealing service for investors who want to make their own investment decisions. It does not provide advice on the suitability of products and investments; if you are unsure about the suitability of any investment you should seek professional advice. Clients of our Investment Advisory Service and Managed Portfolio Service can use the website to obtain current valuations of their investments but cannot trade on these accounts online and should call their adviser if they wish to discuss changes to their investments.

Past performance or any yields quoted should not be considered reliable indicators of future returns. Restricted advice can be provided as part of other services offered by Bestinvest, upon request and on a fee basis. Before investing in funds please check the specific risk factors on the key features document or refer to our risk warning notice as some funds can be high risk or complex; they may also have risks relating to the geographical area, industry sector and/or underlying assets in which they invest. Prevailing tax rates and relief are dependent on your individual circumstances and are subject to change.

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