You can invest your annual tax-free allowance in a single ISA, or split it between multiple types.
The two most common types of ISA are a Stocks and Shares ISA and a Cash ISA.
A Cash ISA is low risk, they are widely available through banks and building societies and many providers offer instant access to your money. With interest rates low however, so are the likely returns.
You can opt for a Fixed Cash ISA, where the interest rates offered are a little higher but there are restrictions on when you can access your money. Plus, when the rate of inflation is higher than the interest rate, the value of your savings effectively erodes.
This is one of the reasons why savers are opting to open Stocks and Shares ISAs. They give you the opportunity to invest in equities which have the potential to outperform cash.
Over the last 118 years, UK equities returned 5.1 per cent per year on average compared to 0.7% from cash (Barclays Equity Gilt Study 2018). Investment is not without risk however and the value of your portfolio can fall as well as rise.
By splitting your annual allowance, you can keep some of your money close at hand in a Cash ISA and look for stronger, longer-term growth through a Stocks and Shares ISA.
By transferring existing ISAs to Selftrade you'll be able to unlock great value and take advantage of our competitive pricing.
Transfer to Selftrade and we will refund any fees you might be charged, up to £100 per new account.
And because our offer is for each new Selftrade account, that could mean a £300 refund if you transferred to a Dealing Account, Stocks and Shares ISA, and a SIPP.