With many analysts picking out their best stocks to invest in stocks and shares ISA, it’s time you also concentrate on planning for your ISA allowances. Of course, you can keep your tax-efficient savings in cash. But it is also possible to grow your savings and wealth in the same tax-saving manner as part of your ISA.
If you didn’t know already, every adult living in the UK has an ISA allowance of £20,000 for the financial year 2021-22. It is known as the annual ISA allowance. This limit is set by the UK governments and is subject to change from one financial year to another. This scheme allows UK adults to save a certain amount of money without having to pay any taxes on capital gains.
How to put money in an ISA?
The UK tax year runs from the 6th of April to the 5th of April. So, you have to put your money in an ISA by midnight on the 5th of April. Depending on your eligibility, you can either invest all your allowance in Cash ISAs, stocks and shares ISAs, lifetime ISAs etc. There are some other types of ISAs too, such as the innovative finance ISAs.
Stocks and shares ISAs offer the biggest percentage of returns. You can either invest your allowance yourself or take advantage of a reliable ISA fund. Either way, you would need to sign up with a reliable ISA provider to start investing.
Finding the best ISA platform
Before you can invest your tax-free allowance into ISAs, you have to find a platform that is reliable, cost-effective, and accessible. You should also look for a platform that offers easy transfers of ISAs, while also allowing you to reinvest your gains back to the ISAs.
Not all the platforms are the same, mind you! Some offer limited options to invest in, while others may cost a huge charge. Besides, some platforms may not allow real-time access to your money or easy transfers. The minimum funds to start investing is also not the same across different platforms.
The best platform is, of course, the one that offers an accessible service with utmost reliability. It shouldn’t cost a lot in platform charges or brokerage fees. In fact, the best platform shouldn’t charge any platform fees, especially with so many providers vying to attract the same customers.
Another key factor to consider is how accessible it is to withdraw your money. I mean, stocks and shares ISAs may require a medium to long-term investment strategy. Then again, you should be able to withdraw your money as soon as you need it. Considering the risks, the best platform should also allow its users to start with a small fund.
To conclude, investing in stocks and shares ISAs may be tax-free but not risk-free. You can lose money just like any other investments. So, please be extra careful while choosing your ISA stocks, packages, or platforms.