Whether you are new to Individual Saving Accounts (ISA) or you already know your way around saving and investments, there are a few things you should know and understand to help you make the most of your ISA. Here are a few things you need to start money management.
The ISA allowance is seemingly not increasing for some time now. This isn’t a problem for several people. However, the fact that the amount is being held at £20,000, this means that you have a huge chunk of funds you can put away. It gives you the chance to save or invest. The good news is that f you are looking to save for a child, you can take advantage of the Junior ISA since it was increased from £4,260 to £4,368 in April 2019.
2. You have options to save or invest
When you are saving into an ISA, there are a lot of choices at your disposal. For instance, you can go beyond just making your savings in cash but go ahead and invest your funds in stocks and shares ISA. If you are a newbie, you don’t have to worry about the complexities of stocks and shares ISA because they are designed to be easy to use. You don’t need extensive knowledge of the issue to find your way around it. Even though you may find that your returns on investment are a bit higher than that of your returns on savings, the risks involved are largely dependent on the performance of the stock markets. Other options include innovative finance ISAs and cash ISAs.
3. Transferring your current ISA balances
This is a very important aspect, whether you are a new or an existing saver. Whether you have stocks and shares or cash, you can choose to transfer all or some of your ISA balances to a better account. This means that you have the opportunity of moving your money to a more competitive account instead of leaving it lying in an account with a less-competitive rate.
However, it is important not to make withdrawals to pay them into a new account. The reason behind this is that once you withdraw the money or once it is out, it automatically loses the tax-free status. Therefore, ensure that the transfers you make are from ISA to ISA making use of the bank’s transfer-in service to help you keep your savings tax-free.
4. You can increase your payments
If you are always making an effort of making regular payments into your ISA, then you are on the right track. This is regardless of the amount you make, provided that they are regular. Since the allowance on ISA has been constantly increased over the past few years, you have the chance to raise your payments if you can afford to.