Stocks and Shares ISAs / Investment ISAs

Often referred to as Investment ISAs, Stocks & Shares ISAs can offer a tax-efficient investment opportunity for your ISA allowance.

If you're looking for a tax-efficient savings vehicle and are comfortable with an element of risk, a stocks & shares ISA could be for you. It's essentially a tax-efficient wrapper for your savings, but rather than keeping it in cash, your money is invested in the stock market.

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Stocks and Shares ISAs

UBS SmartWealth Stocks and Shares ISA
Account Type: Investment ISA
Min. Investment: £15,000
Funds available: 5 investment strategies

Further information... UBS SmartWealth offers a simple and convenient way to invest online. The tool is designed to provide expertise at your fingertips and help individuals meet their life goals. You will be recommended a personalised investment strategy based on your finances, objectives and how you feel about risk. It offers constant access to regulated advice, and tracking of investment performance against those goals, anytime, anywhere, and on any device. It also gives you access to the news and research of UBS, which is the largest wealth manager worldwide with over 150 years experience, therefore, you can relax knowing our 900+ global investment experts have got it covered.

The price and value of investments and income derived from them can go down as well as up. You may not get back the amount originally invested.

Investec Stocks and Shares ISA
Account Type: Investment ISA
Min. Investment: £10,000
Funds available: 5 portfolios

Further information... With a Click & Invest Stocks & Shares ISA you'll get an actively managed online investment portfolio that is specific to you and your investment goals. Our specialist Investment Managers and in-house Research Teams will create and continuously manage your investment portfolio so you don't have to. We are part of Investec Wealth & Investment, who have over 180 years of experience in managing client investments.

All investment carries risk and you may get back less than you invested.

Virgin Money Stocks and Shares ISA
Account Type: Investment ISA
Min. Investment: £1 or £1/month
Funds available: 5 funds

Further information... Virgin Money's passively managed range offers a choice of five funds. Each with a different level of risk and potential reward so you can choose the fund(s) that best meet your needs. Generally, the more risk you are prepared to take with your money the greater the potential reward. There is an annual ongoing charge of 1% of the value of your fund - no other charges.

Remember, the value of your investment can go down as well as up and you may get back less than you invest.

Moneyfarm Stocks and Shares ISA
Account Type: Investment ISA
Min. Investment: £1
Funds available: 12 portfolios

Further information... A Moneyfarm Stocks and Shares ISA offers a personalised, hassle-free, tax-free investment solution. Moneyfarm crafts a portfolio suited to your investor profile and risk tolerance, then fully manages it on your behalf, so you don't have to. Whilst there is no minimum investment, it is recommended to start with £1,500 or more to get a fully diversified portfolio. There is one low management fee ranges from 0.4% to 0.7%, plus the underlying cost of the investments. Regulated by the FCA and protected by the FSCS. Your capital is at risk.

£20,000 managed free of charge for 1 year with code MFACT20K.

Shepherds Friendly Stocks and Shares ISA
Account Type: Investment ISA
Min. Investment: £30
Funds available: 1

Further information... The Shepherds Friendly Stocks and Shares ISA is actively managed by a team of expert fund managers and can be opened from £30 a month, or with an initial lump sum from as little as £500. Managing your savings online is easy too, you can log-in to 'Your account' on the move, with the ability to add money to your plan whenever you want.

Additionally, when opening a Shepherds Friendly Stocks and Shares ISA, we'll give you a Love2shop voucher worth up to £30, which can be spent at various online retailers. Terms and conditions apply, see Shepherds Friendly website for more details.

Remember, when investing your capital is at risk, and the value of your ISA may go down as well as up.

Barclays Investment ISA
Account Type: Investment ISA
Min. Investment: Any lump sum

Further information... Clear, straightforward pricing with no hidden charges. Invest in over 2,000 funds plus Exchange Traded Funds (ETFs), Investment Trusts, shares, new issues and more.

Investments can fall in value. Barclays Smart Investor doesn't offer advice. If unsure, seek independent advice.

Nutmeg Stocks and Shares ISA
Account Type: Investment ISA
Min. Investment: £500
Funds available: 10 managed and 5 fixed allocation portfolios

Further information... Get an intelligent stocks & shares ISA portfolio. Choose a portfolio that's fully managed by our expert team, or one designed to remain steady and re-balance automatically. No tie-ins, no set-up fees, no exit charges. Easy, online set up in minutes. Start with as little as £500 (plus £100 per month for ISAs below £5,000). Management fees of 0.25% to 0.75% depending on how much you invest. There are also underlying charges, please see our fees page. Plus live chat, amazing customer support and brilliant investor tools and guides. Regulated by the FCA and protected by the FSCS. Capital at risk.

All investment carries risk and you may get back less than you invested.

One Family Junior ISA
Account Type: Junior ISA
Min. Investment: £10 per month
Funds available: 2 funds

Further information... The OneFamily Junior ISA helps you to invest for your child's future. It could help towards going to uni, driving lessons or perhaps helping to pay for a flat of their own.

It's designed to be a long term children's investment. You invest for your child's future, and only the child can take the money out and only once they're 18. Because it invests in stocks and shares, the Junior ISAs value can fall as well as rise, so your child could get back less than has been paid in.

Open your child's Junior ISA online and set up a Direct Debit and as a thank you OneFamily will send you up to £50 in e-vouchers (gift terms and conditions apply - please see OneFamily website).

All investment carries risk and you may get back less than you invested.

Hargreaves Stocks and Shares ISA
Account Type: Investment ISA
Min. Investment: £100 or £25/month
Funds available: 2,500 funds

Further information... The Hargreaves Stocks and Shares ISA has no dealing charges for funds, plus a low cost reinvestment service. There are super low annual charges on a range of leading funds, exclusive low charges on leading tracker funds and low annual account charge for funds of just 0.45%

94% of our clients rate our service as good, very good or excellent. (Survey in September, 2014 9,371 respondents)

Scottish Friendly My MoneyBuilder (ISA)
Account Type: Investment ISA
Min. Investment: £10/month

Further information... Put a little money aside for you. Start from £10 a month. Get £50 cashback when you pay in at least £50. Capital at risk. £50 exit fee applies within the first 5 years.

Scottish Friendly My UK Tracker Options (ISA)
Account Type: Investment ISA
Min. Investment: £10/month

Further information... A very British investment in the UK stock market from just £10 a month. Get £50 cashback when you pay in at least £50. Capital at risk. £50 early exit fee applies.

Scottish Friendly My Select (ISA)
Account Type: Investment ISA
Min. Investment: £10/month

Further information... Start investing for your future from £10 a month. Choose from a range of funds to suit your investment goals. Get £50 cashback when you pay in at least £50. Capital at risk. £50 early exit fee applies within the first 5 years.

Scottish Friendly My Select (Junior ISA)
Account Type: Investment ISA
Min. Investment: £10/month

Further information... Start investing for your child's future today. Open a Junior ISA from £10 a month. Get £50 cashback when you pay in at least £50. Capital at risk. £50 early exit fee applies within the first 5 years.

What is a stocks & shares ISA?

A stocks & shares ISA (otherwise known as an equity or investment ISA) is a way to invest in a wide range of funds on the stock market while retaining the tax-efficient element of a traditional cash ISA, with the money held being exempt from income and capital gains tax (other than dividends which may be subject to a tax charge depending on the amount of dividend income you receive).

Unlike cash ISAs, however, the stocks & shares version will actively invest your money across your choice of funds in the stock market. The majority of such accounts use collective investment funds, such as Unit Trusts or Open Ended Investment Companies (OEICs), and investors can either receive a form of income during the term of their investment or can wait until they encash their investment.

What's the difference between a cash ISA and an equity ISA?

The key difference between cash ISAs and equity ISAs is that the cash version holds onto your cash and pays interest at a set rate, while an equity ISA actively invests your money into external funds or company shares for the potential of bigger returns.

However, an equity ISA is not a savings account and should be viewed as an investment product. It's a higher-risk home for your money with the returns based on the performance of the specific funds, and there's a chance you could lose some or all of your initial investment. There are different rules regarding FSCS protection too, with investors currently covered for up to £50,000 instead of the £85,000 that cash ISA savers benefit from.

Buying a stocks & shares ISA - before you get started

Stocks & shares ISAs are more complex than cash versions. There are a number of different products you can choose from and funds you can invest in depending on your goals, with the key decision being whether you want to generate an income (in which case you'd choose income generating funds, denoted by the term "Inc") or want to grow your initial investment (where you'd need accumulation funds, denoted by the term "Acc").

You need to make sure you're comfortable with the level of risk involved, as well as the long-term nature of equity ISAs. There's no guarantee with this kind of investment and you may get back less than you put in, so despite the potential to secure better returns than with a traditional savings account, it's important to weigh up this factor.

It's only really suitable if you're willing to commit your money to an account for the long-term, too, as this will offer the best scenario for growth. While most funds can be sold at relatively short notice, this type of account won't be good for those who may need to dip into their savings in an emergency, so make sure you view it as a longer-term undertaking.

You'll also want to remember that, even though your investments will essentially be held in a tax-free account, there could still be certain tax payments and fund charges applicable. Equity ISAs are exempt from income and capital gains tax, while the taxation of dividends changed in April 2016, so that dividends are also paid free of tax if held within an ISA. However, these ISAs will usually charge fees, so always check the small print to see if the particular account is worth it.

Understand the risks

Any investment comes with an element of risk, particularly those with the prospect of higher returns, and it's important for any potential investor to understand them. Over time there could well be fluctuations in the value of an investment with the total value and any income generated going down as well as up, and in a volatile market some investors may get back less than they put in.

Different types of investment fund have different levels of risk - or to put it another way, they will be more volatile. For example, funds investing in smaller companies or emerging markets will be more volatile than funds that invest in UK blue chip firms. Also, growth funds investing in shares are more likely to be more volatile than funds investing in fixed interest investments such as Government gilts or corporate bonds.

It is usually a good idea to invest across a range of investment types (or asset classes) such as shares, bonds, property and cash to spread your risk. How much you invest in each category will depend on how much risk you are prepared to take, and how long you intend to invest for. Whatever you chose, please note that past performance should never be seen as an indicator of future returns.

Disclaimer: This is a basic guide to stocks & shares ISAs. It does not cover every circumstance and nor is it intended to be a source of advice. This information is aimed at customers within the UK. Tax treatment depends on your individual circumstances and may be subject to change.