Best 10 Stocks and Shares ISAs (2024 Review)
Updated October 18, 2023
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- A List of Top Stocks and Shares ISAs Providers for October 2024
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- Description of the Best Stocks and Shares ISAs for October 2024
- Top Ready-Made Stocks and Shares ISAs
- Top Self-Invested ISAs
- What Is a Stocks and Shares ISA?
- What Types of Investments Are Available via a Stocks and Shares ISA?
- Are Stocks and Shares ISAs Risky?
- What Is the Average Return on a Stocks & Shares ISA?
- What Fees Will I Pay for My ISA?
- What Is the Difference Between a Cash ISA and an Investment ISA?
- Key Pros and Cons of a Stocks and Shares ISA
- Is a Stocks and Shares ISA Right for You?
- What Are the Alternatives to Stocks and Shares ISAs?
- How to Choose a Stocks and Shares ISA to Invest In
- How to Open and Pay into an Investment ISA
- Frequently Asked Questions
- Final Thoughts
Description of the Best Stocks and Shares ISAs for October 2024
Selecting a stocks and shares ISA can be a complex process as there is a lot to consider.
These are some of the top-rated providers of stocks and shares ISAs:
1. IG
Pros
- Highly regulated
- MetaTrader 4 (MT4)
- Over 10,000 instruments
- Available in the UK and US
- 24/7 customer support
Cons
- No deposit compensation scheme for US accounts
- No copy trading
- Inactivity fees
Low monthly fee, easy to manage and access to various investment options.
2. Nutmeg
Pros
- Regulated by the FCA
- Available through web and mobile
- Relatively low minimum deposit
- Choice of portfolios to suit different risk levels and investment styles
Cons
- Fees are higher than some competitors
24/7 access to your account, easy to see how your investments are performing and a range of options for managing your funds.
3. Barclays
Pros
- Choice of ready-made and self-directed investment options
- Useful research tools
- No minimum account deposit
- Regulated by the FCA
Cons
- High fees
- Requires Barclays current account for mobile app access
No minimum initial investment amount, no minimum monthly investment amount and over 2,000 available investment funds to choose from.
4. Halifax
Pros
- No minimum deposit
- Useful research tools
- Regulated by the FCA
Cons
- High fees
- Need to register for online banking to access the mobile app
No required minimum investment amount, over 2,500 investment funds to choose from and a very low minimum monthly investment rate.
5. Coutts
Pros
- Choice of funds to suit different risk levels
- Focus on sustainable investing
- Relatively low minimum deposit
Cons
- High annual management fees
- Requires a Coutts bank account to open an ISA
Low monthly fee, easy to manage and access to various investment options.
6. Wealthify
Pros
- Environmentally and socially responsible investing available
- User-friendly website and mobile access
- Choice of investment styles to suit different risk levels
- Low £1 minimum investment
Cons
- Lacks research resources
- Limited hands-on control may not suit experienced investors
Available from a low monthly rate with a monthly flat fee in place, no exit fees and low trade costs.
7. IWeb
Pros
- No annual account fees
- Operated by Halifax (FCA regulated)
- Straightforward, fixed commission fees regardless of trade volume
- Suits experienced traders with larger portfolios seeking low trading fees
Cons
- £100 account opening charge
- Lacks research and isn't the best option for beginners
No minimum investment lump sum required, no minimum monthly investment amount and over 2,500 investment funds to choose from.
8. Interactive Investor
Pros
- Useful research resources
- Good low-fee option for larger portfolios
- Available via web and mobile app
- Wide range of investment options including ethical investments
Cons
- Monthly fee
- Can be expensive for smaller portfolios
Low monthly fee, monthly investments from as little as £25 a month and over 3,000 funds to choose from.
9. Freetrade
Pros
- Small fixed monthly fee with no percentage fee
- Commission-free trades
- User-friendly interface
- Regulated by the FCA
- Fractional shares available
Cons
- Lacks research and educational resources
- Limited range of product offerings
- Currency conversion fees
- No customer support by phone
Flat-rate ISA with a very low monthly fee, unlimited zero commission, instant trades and a choice of over 3,000 funds covering various sectors from the global market.
10. Fidelity
Pros
- In-depth educational and research resources
- User-friendly interface
- Wide choice of investments
- Good customer support
- Well-established company with extensive history
Cons
- High minimum deposit
- Average to high fees for smaller portfolios
Thousands of investment-fund opportunities to choose from, access to expert guidance and advice, and phone support six days a week.
Top Ready-Made Stocks and Shares ISAs
A ready-made stocks and shares ISA, also known as a robo-adviser ISA, is a type of individual savings account (ISA) that invests your money into pre-built portfolios managed by investment professionals or algorithms.
These portfolios are usually diversified across a range of assets, such as stocks, bonds and other investment products, to help spread risk and maximize potential returns.
Ready-made stocks and shares ISAs offer a simple and hassle-free investment solution for those who don't have the time or expertise to manage their investments actively.
They usually offer a range of portfolios with different risk levels to cater to different investor profiles. The fees for ready-made stocks and shares ISAs are usually lower compared to actively managed funds, making them an affordable investment option.
Ready-made stocks and shares ISAs are an excellent option for novice investors or those who want to build a diversified investment portfolio without the hassle of choosing individual stocks and bonds.
Some Ready-Made Stocks and Shares ISAs worth considering include:
- Nutmeg – Offers a range of ready-made portfolios with different risk levels and low fees.
- Vanguard – Offers a range of ready-made portfolios with different risk levels and low fees.
- AJ Bell – Offers a range of ready-made portfolios with different risk levels, with a minimum investment of £25 per month.
- Wealthsimple – Offers a range of ready-made portfolios with different risk levels and low fees.
- Hargreaves Lansdown – Offers a range of ready-made portfolios with different risk levels and a range of investment options.
- Moneyfarm – Offers a range of ready-made portfolios with different risk levels and low fees.
Top Self-Invested ISAs
A self-invested ISA (Individual Savings Account) is a type of investment account that allows you to hold and manage a wide range of investments, including stocks, shares, funds, bonds and more, within a tax-efficient wrapper.
It provides investors with greater control over their investments and the flexibility to choose the assets they want to invest in.
Unlike other types of ISA accounts, such as cash ISAs, self-invested ISAs allow investors to actively manage their investments and make their own investment decisions.
Investors can choose to invest directly in individual stocks and shares, or through investment funds such as unit trusts, investment trusts and exchange-traded funds (ETFs).
Self-invested ISAs typically charge a platform fee for the use of the investment platform, as well as additional fees for buying and selling investments.
However, they are a popular choice among investors who want greater control and flexibility over their investments, and are willing to take on the risks that come with managing their own investment portfolio.
Some self-invested ISAs worth considering include:
- Interactive Brokers – Offers a self-invested ISA with a wide range of investment options at competitive trading fees.
- Fidelity – Provides a self-invested ISA with a broad selection of investment options at a low platform fee.
- Charles Stanley Direct – Also provides research and analysis tools, portfolio management tools, and regular investment opportunities.
- Nutmeg – Provides a self-invested ISA with a range of investment options, including portfolios managed by experienced investment managers, at a low platform fee.
- IG – Offers a self-invested ISA with competitive trading fees.
What Is a Stocks and Shares ISA?
If you have found that cash savings are not delivering the investment you require, or if you are a first-time investor, it may be worth looking into opening a stocks and shares ISA.
An ISA is a tax-saving route to investment as interest from an ISA is not taxed in the same way as normal savings or investments.
An ISA may offer a more reliable route to long-term growth than many alternative tax-saving options. It is important to note, however, that there is an annual ISA allowance limiting how much you can invest.
A stocks and shares ISA is a type of ISA that has investments within it instead of cash. Regardless of the name ‘stocks and shares’, this form of ISA can hold a wide range of different investment options.
It is important to note that a stocks and shares ISA is not an investment in itself. It is an account in which you can purchase a wide range of different investments on a tax-free basis, up to the maximum allowable limit.
The usual route to a stocks and shares ISA is to select an ISA provider who will offer you a range of product types to choose from. These can be pre-made or bespoke, depending on which ISA provider you choose.
Anyone over the age of 18 can open an investment ISA.
What Types of Investments Are Available via a Stocks and Shares ISA?
A stocks and shares ISA acts as a tax-free wrapper around an investment of your choice. However, any growth that occurs outside the allowable tax-free bracket is taxable.
There are lots of different investment types available via an ISA.
These include:
- Investment trusts
- Exchange-traded trusts
- Stocks and shares
- Unit trusts
- Bonds (both corporate and government)
- Open-ended investment companies
Are Stocks and Shares ISAs Risky?
Stocks and Shares ISAs can carry a certain level of risk, as with any investment. The value of your investments can go up as well as down, and you may get back less than you invested.
The level of risk involved with a Stocks and Shares ISA depends on the investments you choose to hold within it.
For example, investing in individual stocks can carry a higher level of risk than investing in a diversified fund that holds a range of stocks and shares.
It's important to remember that risk and reward are often related. While there is no guarantee of returns, historically, the stock market has tended to outperform cash savings over the long-term.
Ultimately, the level of risk you're comfortable with will depend on your individual circumstances, such as your investment goals, time horizon and financial situation. It's important to consider these factors carefully before investing and to seek professional financial advice if you're unsure.
What Is the Average Return on a Stocks & Shares ISA?
The average return on a Stocks and Shares ISA can vary significantly depending on:
- The types of investments held within the account
- The level of risk taken
- The length of time the investments are held
There is no guaranteed return on a Stocks and Shares ISA as the value of investments can go up and down, and past performance is not necessarily indicative of future results.
However, historically, the stock market has tended to outperform cash savings over the long-term.
According to research by Barclays in its Equity Gilt Study 2021, the average annual return for a Stocks and Shares ISA over the past decade was around 5.1% after fees, while the FTSE All-Share Index returned an average of 7.2% per year over the same period.
It's important to note that these figures are based on past performance and are not a guarantee of future returns. The performance of your own Stocks and Shares ISA will depend on a variety of factors, including the investments held within it and market conditions.
What Fees Will I Pay for My ISA?
The fees you will pay for your ISA depend on the provider you choose and the type of ISA you open.
Here are some common fees associated with ISAs:
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Annual management fee – This fee is usually a percentage of your total investment, and typically ranges from 0.25% to 1%. For example, if you invest £10,000 in an ISA with an annual management fee of 0.5%, you would pay £50 per year.
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Platform fee – This fee can vary from provider to provider, but is typically around 0.25% to 0.45% of your total investment. It is usually charged annually, and may be deducted directly from your ISA or charged separately.
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Fund charges – If you invest in funds, there may be charges associated with those funds, such as an annual management fee or transaction fee. These charges can vary depending on the fund and the provider.
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Trading fees – If you trade individual stocks or shares, you may incur trading fees, which can vary depending on the provider. For example, some providers may charge a flat fee per trade, while others may charge a percentage of the transaction value.
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Exit fees – Some ISA providers may charge an exit fee if you transfer or withdraw your ISA before the end of the term. This fee can vary from provider to provider, but is typically around 1% to 2% of the value of your ISA.
It's important to note that the fees you pay for your ISA can have a significant impact on your investment returns over time, so it's important to choose a provider that offers competitive fees and aligns with your investment strategy.
What Is the Difference Between a Cash ISA and an Investment ISA?
A stocks and shares ISA is rather different from a cash ISA, which is a form of high-interest bank account on which you don’t pay interest.
With an ISA for stocks and shares, you are investing rather than saving money.
The key benefit of a stocks and shares ISA is that it is easier to invest in a range of opportunities without having to pay tax on the growth from them. Of course, if you exceed your ISA allowance limit, you’ll need to pay tax on any additional investments and funds made.
An ISA simply acts as a route to investment, rather than being an actual investment itself. This means that there are plenty of investment options to choose from; your ISA simply acts as the means to get to that point.
Another benefit of a stocks and shares ISA in comparison to a cash ISA is the increased potential for growth.
A cash ISA will always be limited by the interest level offered by the provider. A stocks and shares ISA is not limited in the same way; interest comes from the places where investments are made.
However, it is important to note that a stocks and shares ISA comes with a higher level of risk than a cash ISA.
Key Pros and Cons of a Stocks and Shares ISA
As with most forms of investment, there are advantages and disadvantages to a stocks and shares ISA:
Pros
- You can have a range of investments without paying capital gains tax on growth
- A stocks and shares ISA is a great introduction to investing
- Potential for growth is far higher in a stocks and shares ISA than a cash ISA
Cons
- Stocks and shares ISAs are high risk as they are a volatile asset
- You cannot always access your funds when you need them due to the volatility of the market
- The restrictive limit on annual ISA allowances means you can only invest up to a certain amount
Investing is not for everyone, especially investing that comes with a level of risk, like stocks and shares investment through an ISA. Before you choose to open a stocks and shares ISA, it is important to understand the financial risks involved.
Is a Stocks and Shares ISA Right for You?
A stocks and shares ISA could be a good fit for your financial investment needs if you:
- Want to put your funds into investments but want to protect your profits from tax charges
- Don’t need to have immediate access to your funds, and are keen to keep your money invested for a long period. Ideally, this should be at least five years
- Have not used your ISA allowance for the current tax year
- Are comfortable knowing that the value of your investments may move up or down depending on their market value
- Understand the risk that comes with any form of investment
What Are the Alternatives to Stocks and Shares ISAs?
There are several alternatives to Stocks and Shares ISAs, each with their own benefits and drawbacks.
Here are a few:
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Cash ISAs – These are similar to Stocks and Shares ISAs, but instead of investing in stocks and shares, your money earns interest. Cash ISAs tend to be lower risk, but offer lower potential returns than Stocks and Shares ISAs.
-
Lifetime ISAs – These are similar to Stocks and Shares ISAs, but with a focus on saving for retirement or buying a first home. The government offers a 25% bonus on contributions up to £4,000 per year.
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Pensions – These are a long-term savings vehicle designed to provide income in retirement. They offer tax advantages, but also come with restrictions on when and how you can access your money.
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Property – Investing in property can be an alternative to Stocks and Shares ISAs, with the potential for long-term capital growth and rental income. However, property investments also come with risks, such as changes in property values and rental demand.
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Cryptocurrencies – These are digital currencies that use encryption techniques to regulate the generation of units and verify the transfer of funds. Cryptocurrencies are a high-risk, high-reward investment, and should be approached with caution.
How to Choose a Stocks and Shares ISA to Invest In
When it comes to choosing the best stocks and shares ISA, it can seem like a daunting task as there are many providers to choose from.
While each stocks and shares ISA is designed to do the same thing, each provider has specific pros and cons. For instance, some stocks and shares ISAs carry fewer costs than others.
The price differences between various investment platforms can vary significantly. Some platforms charge a fee based on percentage, others charge based on the size of the investment portfolio. Other providers charge a flat rate or a combination of different types of rates.
When selecting the right stocks and shares ISA, it is important to take into account your specific circumstances.
For instance, percentage-related charges tend to be a better option for investors with small portfolios worth under £50,000. On the other hand, for anyone who regularly buys and sells investments, it is best to select a platform that works on a flat-fee basis.
It is important to know the size of your initial investment before selecting a stocks and shares ISA as this will impact which ISA is best for you and your specific investment requirements.
Choosing the correct stocks and shares ISA is an important step, but there is no one-size-fits-all option. Ultimately, the investments determine the success of a certain ISA, not the ISA itself.
How to Open and Pay into an Investment ISA
The process of opening a stocks and shares ISA for the first time can seem intimidating as there is a lot to take into account.
However, by following a few simple steps you can make the process easier and less daunting.
Step 1. Determine How Much You Want to Invest
Remember, the amount that you allocate to a stocks and shares ISA will need to be an amount you can afford not to have access to right away, so it is important to think carefully about what you choose to invest.
If you will need access to your funds within five years, it may be better to opt for a cash ISA rather than a stocks and shares ISA.
Step 2. Decide Who Will Manage Your Funds
The next step is to decide whether you will be managing your funds yourself via a fund supermarket or whether you would prefer to have someone else manage your funds on your behalf.
If you opt for the latter route, it is worthwhile considering whether you will use a specialist robo advisor service, such as those offered by Nutmeg and others, or whether you will use a more traditional approach and work with a wealth manager.
A robo advisor service is a form of online fund management that uses specialist algorithms to manage funds effectively. Compared to traditional wealth managers, it is a far more budget-friendly option.
Step 3. Think About Risk
Before you begin trading, you must take the time to think about your attitude to risk.
If you are unsure, consider undertaking a free online risk assessment to determine how you feel about investment risk.
Step 4. Select Your Investments
Once you have completed the forms for opening a stocks and shares investment ISA, the next step is to think about your investments.
You can invest as soon as your ISA is live, although there is no pressure to invest immediately.
When you choose to invest is a personal choice. Some investors prefer to add a lump sum to their ISA account, others opt to slowly drip feed funds into it throughout the year.
Ensure that you carefully research all potential investments and monitor the market carefully to help mitigate the associated risks. Don’t let your funds sit in your account unused for too long. If you don’t invest them, you won’t gain any interest.
Step 5. Get Your Account Settings Right
Once you have opened your stocks and shares ISA, the next step is to ensure that your account settings are correct.
For example, you can create alerts, set limits on how much you spend within a set period and set up paperless reporting.
A Stocks and Shares ISA, also known as an investment ISA, is a tax-efficient way to invest in a range of investments, such as stocks, shares, bonds and funds.
The aim is to help people save money on taxes while earning potentially higher returns than a traditional savings account.
You can only pay into one Stocks and Shares ISA in each tax year, but you can have multiple ISAs open at any time.
However, you can only contribute to one per year, and you cannot exceed the annual limit.
Stocks and Shares ISAs work by allowing you to invest your money in a range of different investments, free of UK income tax and capital gains tax.
You can choose from a range of investment options, including shares, bonds, funds and exchange-traded funds (ETFs).
The best performing Stocks and Shares ISAs will depend on your investment goals and risk appetite.
It is essential to do your research, compare the fees and charges, and choose a reputable provider with a solid track record.
It is also essential to diversify your investments to manage risk.
As with any investment, there is a risk associated with investing in Stocks and Shares ISAs.
The value of your investments can go up or down, depending on market conditions.
It is important to consider your risk tolerance and diversify your portfolio to manage your investment risk.
The benefits of investing in a Stocks and Shares ISA include tax efficiency, potential for higher returns and a range of investment options to choose from.
With a Stocks and Shares ISA, you can benefit from compounding growth over the long term, as well as flexible investment options to suit your investment goals.
The best platforms for keeping your Stocks and Shares ISA will depend on your investment goals, risk appetite and investment style.
It is essential to compare the fees and charges of different providers, as well as their investment options and customer service reputation.
Yes, you can withdraw money from a Stocks and Shares ISA at any time without penalty. However, you may lose out on potential investment returns if you withdraw your funds too soon.
You can hold a wide range of investments in a Stocks and Shares ISA, including stocks, shares, bonds, funds, and exchange-traded funds (ETFs). It is important to consider your investment goals and risk tolerance when choosing your investment options.
When choosing a Stocks and Shares ISA provider, it is important to consider the fees and charges, investment options, customer service reputation and any additional features or benefits.
It is also essential to do your research and compare different providers to find the best option for your investment goals and risk appetite.
Fees for a Stocks and Shares ISA will vary depending on the provider and the investment options you choose.
Common fees include account opening fees, annual management fees, dealing charges and exit fees.
It is important to compare different providers and their fees to find the best option for your investment goals.
Yes, investments in a Stocks and Shares ISA are protected by the Financial Services Compensation Scheme (FSCS).
This means that if your provider goes out of business, you may be able to claim compensation for any losses you have suffered, up to a limit of £85,000.
It is important to note that the FSCS only covers certain types of investments, and the level of protection may vary depending on the provider you choose.
It is also important to remember that the value of your investments can go down as well as up, and you may not get back the full amount you invested.
Final Thoughts
A stocks and shares ISA offers the potential to boost your savings significantly in comparison to a cash ISA. However, it is important to be aware that stocks and shares ISAs always come with a significant element of risk, and returns are not guaranteed.
You could end up with a total loss, so it is crucial to be aware of this before you start.
A stocks and shares ISA can be used for a wide range of investment options, from unit trusts and exchange-traded funds to individual stocks and shares.
This means that you can invest anywhere, knowing that any earnings – up to the upper limit – will be tax-free.
WikiJob does not provide tax, investment, or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.
