An ISA investment may seem an easy proposition from the outside – tax free savings that allow us to maximise our saving potential at a very low risk. However, there are many different types of ISA, and choosing the right one for you will be extremely important if you wish to get the very best return possible.
For example, certain ISAs will not allow access to the money that is being saved without incurring a penalty, whilst others will allow you to transfer to a stocks and shares ISA but not to a cash ISA. Furthermore, the need for an ISA that is based around stocks and shares and those that are not will be different for different people.
The cost of living has risen dramatically over the past twelve months and if this increase continues, it will be important that the rate your ISA offers you is going to be greater than the rate of inflation. If it is not, then by the end of the year, you may well find that you are actually technically worse off than before you started saving. Therefore, for some people, it may make more sense to put money into an ISA that does not have a fixed rate, or into one that allows them to move the funds to one with a better rate should the rate of inflation change dramatically.
The need for regular access, the risk one is willing to take and the actual rate of return one wishes to get will all dramatically affect exactly which type of ISA is right for an individual. As such, it is worth not simply rushing in and choosing an attractive rate, but instead discussing your needs with a financial advisor to better understand which approach will make the most sense for you and exactly what you wish to get from your savings.