If you don’t mind taking a few risks with your money and you have the time to ride out any market fluctuations, putting some money into a tax-efficient stocks and shares ISA could be a smart move. There’s a huge range to choose from, and you don’t even have to invest in stocks and shares – you can invest in bonds, government gilts, commercial property and even commodities such as gold.
Anybody over the age of 18 can hold a stocks and shares ISA, and you can switch to an alternative provider if you find a better deal elsewhere. ISA providers are legally obliged to permit transfers out but do not have to accept transfers in, so check with your preferred ISA provider before beginning the transfer process. It is worthwhile noting that if you are investing in stocks and shares that there may be a slight delay in accessing your funds due to having to sell some investments compared to withdrawing money from an instant access Cash ISA. Many investment experts recommend you invest for a minimum of five years in order to maximise the return on your investment.
Any investment in the stock market should be seen as a long-term proposition, and it’s vital that you understand the risks before building an investment portfolio. The value of your investment – and the income derived from it – can go down as well as up and you may get back less than you originally invested. If you feel unable to tie up your money for five years or more, or if you can’t bear the prospect of getting back less than you paid in, a cash ISA or savings account is almost certainly more suitable for you.