Choosing The Best ISA For Your Needs – Start Today!

Individual Savings Accounts get the job done, but that doesn’t mean that it’s always so simple to figure out what you need to do in order to get where you need to go. Saving for the future is something that everyone talks about, but is it really something that you need to think about in order to push forward? Of course it is!

You see, you have the right to save your money, and there are many different vehicles that are in place for you to do this. It’s all about the type of risk profile that you’re building for your finances.

UK savings and finance isn’t anymore complicated than any other country’s finances, but you do need to look at your options. That’s what we’ve come here to do today.

So let’s bring the conversation back to Individual Savings accounts, shall we?

Individual Savings Accounts are just a financial product that allows you to invest money without being subject to income tax or even capital gains tax if you pull it out to use it for something else. A lot of people assume this means that the funds have to be used for retirement but this isn’t the case at all. You might be saving money for a home purchase or another major purchase where liquid savings would be a wise idea. A broad range of investments can be held within the Individual Savings Account structure, so keep this in mind.

There are two major types of ISAs: cash ISAs and stocks and shares ISAs. You might also hear about Junior ISAs as well — we will get to those in just a moment.

You see, a Cash ISA is exactly what it sounds like. You can deposit cash into the account like any other savings account. The money is tax-free at this point, which can definitely save you a lot of money.

However, there’s the stocks and shares ISA which also tends to get people a little confused. You see, the money that you invest in a stocks and ISA can be put to different investment vehicles while still letting you enjoy tax free growth. You can put money towards a future investment — which would be considered the “cash” portion of the S&S ISA, or you can go into investment trusts. There’s also OEICs, unit trusts, stock market company shares, public debt securities, Eurobonds… the list goes on and on. Suffice it to say that you will definitely have a lot of choices when it comes to how you invest in a stocks and shares ISA.

Earlier we spoke a bit on risk profiles and risk management. With so many different investments you have to realize that a stocks and shares ISA can definitely be a lot riskier. In fact, the only way a stocks and shares ISA qualifies per se is if you can lose up to five percent of the overall value. So while there is reward, there is also risk as well.

So, what about those Junior ISAs? Well, as you can tell by the name, they are going to be the ISAs that are available to those under 18. The child in question must be born on or after 3 Jan 2011 and be a resident of the UK.

There are some limits to an ISA that you need to know about before you get too excited about them. For example, you need to keep in mind that you cannot put in more than the annual limit into ISAs.

The overall limit is 10,680 GBP. The cash limit is going to be 5,340, so keep that in mind when you’re trying to invest money into an ISA — the remainder can go into a stocks and shares ISA. You should also be aware that there can only be one of each — if you try to take out too many accounts, you will lose the benefits and be subject to penalties.

Now is the perfect time to start thinking about ISAs — why not get started today?

Managing your Money with Credit Cards and Share ISAs

Managing money is something that we all have to do. It might not be the most thrilling thing in the world but it is certainly vital and makes good financial and common sense. There are a few different financial tools that you can use to help successfully manage your money and make the most of your finances. Two of these are credit cards and share ISAs. This article looks at a few of their main features and how they can help people who are looking for money management strategies.

Credit cards – interest free

When it comes to credit cards, interest free credit cards are a really good option if you are looking to get control over your finances. This is because, as their name suggests, interest free credit cards allow you to make purchases and then pay them off over an extended period without having to pay any of the interest you would normally be expected to pay.

This has the benefit of often helping people to pay off what they owe faster than they otherwise would have done. One thing to keep in mind with interest free credit cards is that the interest free period will normally be for a limited time only, and so it can be worth paying off your balance before this runs out to avoid accruing any interest on the balance of your card.

Credit cards – 0% balance transfers

0% balance transfer cards can also be a good way to help manage your money. For instance, it is estimated that there are more than 30 million credit card users in the UK with upwards of 58 million credit cards between them. This means that most people with credit cards have more than one, something that is fine for most people but some can find it harder to manage.

0% balance transfer cards are useful if you are looking to consolidate multiple credit cards down into one card. They allow you to transfer over the balance of existing cards and then pay off the balance at a 0% interest rate, so the only fee associated with it will be the administration costs of taking care of the balance transfer.

Again, this is something that is very useful in helping people to pay off what they owe faster and more cheaply than they otherwise would have done. Just remember that any other purchase you make on a 0% balance transfer card will be charged at the normal rate of interest.

Credit cards – limits and payments

Credit cards also have a few other benefits that can help people looking for a money management strategy. For instance, when you are accepted onto a credit card you will be given a credit limit that tells you how much you can spend on your card each month. Also, as a consumer, you have the right to ask for your credit limit to be lowered or to reject any limit raises that are offered to you. If you are trying to keep down the amount of money you are borrowing, this can be helpful.

Something else helpful about credit cards is that items that incur a higher rate of interest are paid off first. This helps to keep down the amount of interest you pay overall and can help pay off balances quicker. For instance, if you have a 0% balance transfer card and transfer over £500 at 0%, but then spend £250 at the standard APR, the £250 would be paid off by your credit card lender before the transferred balance would be.

ISAs – regular saving

Share ISAs are also helpful for many people. You are probably aware that ISAs are a tax-free form of savings; every year you are given a limit for how much you can save tax-free in an ISA. Cash ISAs are common, but if you go for a share ISA then you will be able to save more over the course of the year because as well as the cash element, there is also a stocks and shares element to the product. This means that ISAs are particularly good for people who like to save regularly and want to take advantage of the tax-free interest.

ISAs – potential for investment

Something else offered by share ISAs is the potential for investment: some of the money you invest will be put towards stocks and shares. While the stock market can naturally go down as well as up (meaning there’s a chance you could get back less than you put in), this investment choice can be a good option for people who are thinking about long term financial solutions and are interested in the potential offered by stocks and shares investments.