There are many reasons people may want to invest money, especially when it comes to their future. This is where the stock market comes into play, and people who have enough knowledge of how it works can make money out of investing. One way they can do this is through buying shares in different companies.
However, before you buy any shares, you will need an ISA (Individual Savings Account), which means that your interest in your investment won’t be taxed (HM Revenue & Customs). There are tons of providers out there, but if you don’t know what to look for, then choosing the best ones could end up costing you more than it should do. So, here’s a few steps to follow to get the best ISA provider out there.
Find out what the different providers can offer you
There are different types of ISA account providers, and they can generally be split into two categories; cash, stocks and shares. Cash accounts are where you put your money in for it to sit there until you want it back (or if something unexpected happens like an accident).
Some examples of what could happen are that the money could be used for home improvements, weddings, or even paying off existing debts. Another type of account is where you get exposed to investing in stocks and shares, which will give you more chances to make good profits on your investments but obviously, this comes with a greater risk.
How much money will be needed to start?
This will depend on how much money you have saved up, but one thing is for sure, it takes a lot less time making £20 per month than it does making £2,000 per month. Even though this doesn’t affect what kind of ISA account you can get, it is still a good idea to work out how much money you will need and for how long.
Decide which type of investment you want to make
As discussed earlier, there are two types of ISA accounts; cash, stocks and shares. While this might seem obvious, it is an essential factor in choosing a provider. What kind of money you have saved will determine what kind of investments they can offer you to be eligible inside your ISA account.
Know what your current account offers you as an ISA
However, before you check if the account offers ISA accounts, make sure that you’ve ended up with is not just any old savings account. Some providers will offer existing customers to transfer their accounts over to them to get better returns on their savings. Still, there’s generally no harm in asking whether or not they can do something like this for you, especially if you’ve been with them for a while.
Check the interest rates that are being offered
Once you know your ISA provider can offer you what you are looking for, the next step is to compare the interest rates that each one offers against another. This should help narrow down your choices because, generally speaking, higher interest rates should give you better returns on your money depending on how much is saved up; however, it might also depend on how long they last before extra fees kick in, so it’s always best to check this in detail to make a good choice.
How often should you withdraw your money from your account?
This point only pertains to those who have chosen a cash, stocks and shares ISA account because it is essential to know whether your chosen provider will let you make withdrawals whenever you want or if there’s a limit on how many times you can do this each year.
New investors are advised to use a reputable online broker from Saxo Bank and trade on a demo account before investing real money.