Read on to find out what exactly ISAs are, what an investment ISA is and about an investment platform that may be an option for investors like yourself!
What is an ISA?
An ISA stands for : Individual Savings Account
Every tax year (start on 6 April) you have an annual ISA allowance of £20,000 that you can invest. This is the amount that is currently in place – this has increased over the years since ISAs were introduced.
Whilst there are several types of ISAs available for you including Cash ISA, Lifetime ISA (LISA) and Junior ISAs, this post will focus on Investment ISAs (aka Stocks and Shares ISA).
What is an Investment ISA?
Investment ISAs and Stocks and Shares ISAs are the same thing – it just depends on what investment platform you go with, they will refer to it differently.
An investment ISA allows you to invest in products like investment funds and shares without paying tax on gains or any income earned.
Reasons to have an investment ISA:
- Build wealth for your future self, without paying tax on potential returns. Those who have an investment ISA sometimes see it as a long-term wealth building tool.
- Any growth and income will be free of capital gains tax / income tax – so you can keep all the gains and income for yourself.
- Unlike a lifetime ISA or pension, you can withdraw money charge-free from an investment ISA at any time. But once you’ve withdrawn from your investment ISA, you won’t be able to pay it back in if you’ve used up your allowance for the year (unless it’s what’s known as a flexible ISA). Make sure to check before you open an account.
- Investing gives you the chance to beat inflation, grow your money tax free and provide a way to meet your money goals.
Dodl Investment ISA
Dodl by AJ Bell recently launched 4 types of investment accounts, including an investment ISA!
So what makes Dodl’s investment ISA special:
- Easy to open and start investing. The Dodl investment platform seeks to make investing more accessible and simple for those wanting to invest for the first time
- Low charges! This is something important to look out for when choosing an investment ISA, as charges can really add up overtime. Dodl charges 0.15% per account, per year (minimum £1 per month). Another benefit is that it is free to buy, sell and transfer investments with Dodl, more information on the current charges can be found here
- Choice of investments – from funds, themes and shares. Dodl offers a range of easy to understand investment choice such as 7 ready-made funds which cover a range of risk levels – including a responsible growth fund made up of companies taking their commitment to the planet’s future seriously. The themed investments are pretty exciting and are groups of companies that reflect your values / interests with specific regions or sectors.
Things to remember:
- Investing carries risk – investments can fall and rise in value and you could get back less than you put in
- Dodl does not give investment advice, so it’s important to make sure you read all the investment details in the Dodl app and understand the charges and the risks before you place your order
- To view further information and answers from frequently asked questions from Dodl – read them here
- Bear in mind that ISA rules apply and may change in future
AD- this is a paid post in collaboration with Dodl by AJ Bell