The best Stocks and Shares ISAs
Stocks and shares ISAs enable you to invest within a tax-free wrapper, but the best provider will depend on your individual needs.
Cash ISAs pay interest on your savings, but Stocks and Shares ISAs offer a tax-free way of earning returns on your investments.
So if you’re willing to take a little risk, they could earn you better – and tax free – returns than a regular Cash ISA.
What is a Stocks and Shares ISA?
A Stocks and Shares ISA is an investment account that allows you to buy and sell shares and some other investments, up to £20,000 – the current ISA allowance.
You won’t pay any income or capital gains tax on the money made from the investments you hold within the ISA.
While they come with some risk, Stocks and Shares ISAs might deliver you a better return than a regular Cash ISA because the value will go up and down, according to your investments’ performance.
You can spread your personal allowance across ISAs, storing some of it in a regular Cash ISA, and select your investments in your Stocks and Shares ISA, allowing you to tailor it to the type of risk you’re willing to take.
You can hold investment trusts, exchange-traded funds, individual stocks and corporate or government bonds, among others.
It’s worth noting that the value of your investments could go up or down, so this type of ISA may not be for you if you need immediate access to your money.
If you withdraw your money when your investments are underperforming, you may crystallise your losses. So it’s better to take a longer-term approach to this type of savings account.
Additionally, the options below are all self-managed, meaning that a degree of research will be required alongside investing.
The best stocks and shares ISAs
Trading 212 offers an app-based, no-cost Stocks and Shares ISA. Clients can purchase UK, US and European stocks and shares. However, it does not offer open-ended investment funds. There’s no fee on share, investment trust, and ETF trading.
Investment platform EToro also offers a Stocks and Shares ISA with no account or dealing fees. Clients can purchase UK, US and European stocks among other countries; however, they will have to pay a small foreign exchange fee.
Interactive investor charges £4.99 a month for ISAs with under £50k, and £11.99 for ISAs with more than that saved in them.
Vanguard offers a self-managed ISA for £4 a month, or a managed one for 0.15 per cent a year. As the name suggests, they’ll speak to you about your investment preferences if you opt for the managed version. If you have over £32,000 invested the fee for both is 0.15 per cent a year, up to £375. The managed version also has a 0.20 per cent a year fee. However, with Vanguard you can only pick from their products.
AJBell is a more established name, but it charges a 0.25 per cent fee to hold your investments. There is also a £1.50 fee for fund dealing.
Charles Stanley offers over 12,500 stocks and shares, ETFs and funds. They charge a maximum fee of 0.30 per cent and a £5 monthly platform fee, but savings are available through their loyalty programme. There’s also no minimum investment.
Hargreaves Lansdown is another popular name but has the highest fee on the list, with a charge of 0.45 per cent for accounts with under £250,000. Currently, they are offering 40 per cent off the fee – but the discount runs out at the end of the year.