Best-Performing Stocks and Shares ISAs

Best-Performing Stocks and Shares ISAs

Investing in the stock market is a great way to make your hard-earned money work for you. While a traditional savings account may yield a higher return, your 'money pot' can be eroded if the interest rate is eclipsed by the rate of inflation.

With a stocks and shares ISA, you are taking some risk with your money in the hope that it will grow faster.

This article offers guidance on the best-performing stocks and shares ISAs.

Our Best Stocks and Shares ISAs

  1. Halifax
  2. HSBC
  3. Santander
  4. Fidelity
  5. Fineco
  6. Vanguard
  7. AJ Bell
  8. Hargreaves Lansdown
  9. Interactive Investor
  10. Evestor
  11. Wealthify

What Is a Stocks and Shares ISA?

A stocks and shares ISA is an account that allows you to make a wide range of investments such as exchange-traded funds, individual shares and investment trusts. This type of account is also tax-free.

Investing up to the current ISA annual allowance comes with very low charges. If managed well, a stocks and shares ISA has the possibility of yielding the optimal investment gains.

The Best Performing Stocks and Shares ISAs

It’s important to know the best stocks and shares ISA.

Here are the highest-performing ones right now.

1. Halifax

  • Investment options: There is only a small pool of investment options and ready-made portfolios, making it perfect for beginners
  • Minimum investment: Minimum lump sum of £2,000, monthly investments at a minimum of £100 a month, or a combination of the two
  • Charges and fees: There is a 0.24% platform charge, a 0.25% charge for the fund management services, and a £12.50 per trade share-dealing charge
  • Transfer fees: No closing or transfer fees

Visit Halifax

2. HSBC

  • Investment options: The selection of the best ISA funds is limited for those using in-house advice, but a much broader selection is available for those using the HSBC Global Investment Centre
  • Minimum investment: £50 with investment advice or £100 if you're guided by your own investment strategy
  • Charges and fees: There is a dealing fee of £10.50 per trade for UK shares, a quarterly account fee of £10.50, and a 0.5% fee for investment advice
  • Transfer fees: No closing or transfer fee

Visit HSBC

3. Santander

  • Investment options: This flexible account offers several different ways to invest, including four pre-made investment funds, several self-directed investment funds, and much more
  • Minimum investment: Investing with a minimum deposit of £5,000 or a monthly recurring investment of £20 is obligatory
  • Charges and fees: There is a 0.35% annual fee on the first £50,000
  • Transfer fees: No closing or transfer fees

Visit Santander

4. Fidelity

  • Investment options: Provides access to a variety of funds from different markets, and allows you to combine these investments with traditional shares
  • Minimum investment: £7,500 to activate the low fees
  • Charges and fees: If you invest £7,500, you will pay only 0.35% per year
  • Transfer fees: No transfer fees

Visit Fidelity

5. Fineco

  • Investment options: Access to numerous stocks and shares; build your custom portfolio based on your needs and preferences
  • Minimum investment: Start with as little as £100
  • Charges and fees: An account fee of 0.25% of your total portfolio; for UK shares, dealing starts at only £2.95 per deal
  • Transfer fees: No exit or transfer fee

Visit Fineco

6. Vanguard

  • Investment options: Provides access to hundreds or thousands of bonds or shares in one package
  • Minimum investment: £500 or £100 per month
  • Charges and fees: 0.15% per year
  • Transfer fees: No transfer fees

Visit Vanguard

7. AJ Bell

  • Investment options: In addition to the standard stocks and shares ISAs, this firm offers the largest selection of Junior Stocks and Shares ISA accounts
  • Minimum investment: You can start investing from just £25 per month
  • Charges and fees: £1.50 monthly direct debit
  • Transfer fees: There is a transfer fee of £500

Visit AJ Bell

8. Hargreaves Lansdown

  • Investment options: Either choose from over 2,500 funds, shares, investment trusts and more to build your own portfolio, or be recommended a ready-made portfolio based on your goals and risk appetite
  • Minimum investment: £100 or £25 a month with 'do-it-yourself' option or £1,000 with 'ready-made portfolios' option
  • Charges and fees: Annual fee of 0.45% and a share-dealing charge that can reach up to £11.95
  • Transfer fees: No transfer fee

Visit Hargreaves Lansdown

9. Interactive Investor

  • Investment options: Access to over 40,000 investment prospects, including the UK and international stocks, ETFs, funds and US stocks
  • Minimum investment: No minimum investment amount
  • Charges and fees: Monthly fee of £9.99
  • Transfer fees: No closing or transfer fee

Visit Interactive Investor

10. Evestor

  • Investment options: This robo platform has only three portfolios to choose from. They are low, medium and high risk
  • Minimum investment: A minimum deposit of £1
  • Charges and fees: Platform charge of 0.35% per year and an average fund manager charge of 0.11% per year
  • Transfer fees: No closing or transfer fees

Visit Evestor

11. Wealthify

  • Investment options: Five different portfolios are available on its robo advisor platform
  • Minimum investment: There is a symbolic minimal deposit of £1
  • Charges and fees: The platform is free to use for one year for new investors, after which it becomes 0.6%
  • Transfer fees: No closing or transfer fees

Visit Wealthify

Best Performing Stocks and Shares ISA
Best Performing Stocks and Shares ISA

How Does a Stocks and Shares ISA Work?

Where Can You Open One?

You can open a stocks and shares ISA at one of numerous institutions across the UK. These include:

  • Banks
  • Credit unions
  • Building societies
  • Friendly societies
  • Peer-to-peer lending services
  • Stockbrokers
  • Crowdfunding companies
  • Other financial institutions

If you have a regular provider who holds your other accounts, you may want to consult them about opening a stocks and shares ISA. This way, all your accounts would be handled by one company.

Who Is Eligible for a Stocks and Shares ISA?

There are several criteria of eligibility for opening a stocks and shares ISA:

  • You need to be at least 18 years or older
  • You must be a UK resident with a national insurance number
  • You need to have some money you can afford to lose
  • You mustn't have any outstanding debt

How Much Can You Invest?

The amount you can invest is determined by your annual ISA allowance. For the 2022/23 tax year, this amount is £20,000.

If you've already used some of your allowance for another type of ISA, you will need to deduct that amount from your total ISA allowance to find out how much you can invest in a stocks and shares ISA this financial year.

Do You Pay Tax on Returns?

No. As long as you stay under your annual ISA allowance, you will not pay any taxes on your returns from a stocks and shares ISA.

What to Consider When Choosing a Stocks and Shares ISA

Several factors determine your success with a stocks and shares ISA. Here are some significant factors to consider about this investment option.

Risk

Your savings will be at risk with any investment but less so with a stocks and shares ISA. Essentially, your risks can be minimized by ensuring you won't sell your investment for less money you purchased it for.

The longer you go without selling, the higher the chances of your investment solidifying.

Shorter time frames always allow more things to go south, while leaving your investment alone is more likely to increase it.

Another great way to spread your risk is simply investing in several different ISAs. Not only does this reduce the risk of losing your money, but it also represents a great way to avoid taxes on parts of your income.

FSCS Protection

FSCS is the UK's statutory, non-profit fund that protects investors from losing investments and other payments.

If your stocks and shares ISA provider is regulated by the Financial Conduct Authority (FCA), your money and assets will still be protected by the Financial Services Compensation Scheme (FSCS).

This protection consists of several layers. The first comes from the FCA, forcing the firms to separate their assets from yours.

The second layer comes from FSCS and covers all authorized firms up to a limit of £85,000 per person.

If the firm fails to meet the target investments, the compensation will be slightly lower.

Fees and Costs

The fees depend on the type of investment you want to make and the institution you are using. Some common charges include:

  • A platform charge – A flat fee or a percentage of the overall value of your capital
  • An annual management charge – A percentage of your overall investments deducted each year
  • A flat transaction charge – A fee for trading with stocks and shares
  • A transfer out fee – A percentage based on the overall fund – the more you transfer, the higher the cost

Uses

Stocks and shares ISAs can be of great use for UK-based individuals who want to avoid the low interest rates of regular savings accounts.

You may enjoy higher returns as well as tax benefits.

If you have a significant amount of capital saved and are willing to take a minimal amount of risk in investing it, this type of investment may be for you.

It may also be the right move if you have enough money coming in from other sources to leave a lump sum invested for at least five years to allow you to avoid the unpredictability of the market.

Frequently Asked Questions

With a cash ISA, you will always receive a fixed interest rate, while stocks and shares ISAs don't.

Also, the amount of return on a stocks and shares ISA depends on how you handle your capital. With a cash ISA, you will experience steady growth of your money.

Stocks and shares ISA are typically recommended for those who are thinking of investing and can be especially useful for those who want to invest in their 20s.

Stocks and shares ISAs allow you to make a wide range of investments tax-free.

Some of the options you can put your money towards include investment funds or trusts, individual shares, bonds and gilts.

Given ample research and an adequately long investment period, a stock and shares ISA will definitely be a worthwhile investment.

If you have spare money to put away for several years without touching it, then this type of investment can deliver optimal results.

ISAs are considered tax-efficient savings and investment accounts because you don't pay income tax on the interest or returns you receive from these types of accounts.

Like all investments, stocks and shares carry some risk for investors. However, the chances of losing your investment are much smaller with this type of ISA.

If you're a beginner, you may want to learn more about stock trading.

The maximum amount you can save in an ISA is determined by your annual allowance. This is £20,000 in 2022/23.

In addition, the amount you can save depends on whether you are making frequent withdrawals within a year.

To avoid the risk of losing your money, it's a good idea to invest for the long term.

An investment period of five years is typically enough to get through all the highs and lows of the market.

The most noteworthy fee associated with a stocks and shares ISA is an annual fee, calculated as a percentage of your total holdings.

The higher the amount you have invested in your ISA, the more you will be charged.

Yes, you can withdraw money from your stocks and shares ISA any time you need to.

However, dipping into your ISA and reinvesting in it at a later date during the same tax year counts towards your annual ISA allowance.

There is no limit to the number of ISA accounts that you can hold, but you can invest in just one of each type of taxable ISA per year.

There are four different types of ISA you can pay into during any tax year:

  • Cash ISAs
  • Stocks and shares ISAs
  • Innovative finance ISAs
  • Lifetime ISAs

If you are familiar with using investment platforms for a broad range of products, you can open an ISA without a financial advisor.

However, if you are just venturing into this area, it's a good idea to find an advisor who can counsel you on complex matters such as stocks and shares ISAs.

Final Thoughts

A well-performing stocks and shares ISA often yields a higher return on your savings than other ISAs. For optimal results, this type of account should only be considered a long-term investment.

It's a good idea to consult with a financial advisor and establish another emergency savings fund to avoid touching your ISA. Having done that, all that's left to do is to choose the stocks and shares ISA that fits your needs.


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