In this lower for longer interest rate environment that’s unlikely to change any time soon, there’s no doubt that you need to get your money working harder for you when it comes to this year’s ISA investment. With cash ISAs offering a measly 1.6% at best, and most paying less than 1%, money in the bank is doing little.
Figures show that if you were to put this year’s full ISA allowance of £15,240 into a cash ISA paying just 0.85% a year, you would earn a grand total of £129 in interest. Factor in inflation, which, unlike interest rates, is on the rise, and you might as well not have bothered.
Rather than leaving your savings in a low-interest account or cash ISA, you could consider a stocks and shares ISA instead. Of course, stocks and shares ISAs carry more risk than a cash ISA but the fact is that to get decent returns you may have to take a little more risk with your money. Ideally you also need to leave your money invested for at least five years and preferably more to really give it a chance to grow, so make sure this is money you can afford to tuck away.
Funds are an ideal way to build a balanced portfolio. With a Fidelity stocks and shares ISA you can choose funds from over 100 providers with easy online selection tools and award winning guidance to help you choose. So whether you want to put your money into UK blue chips, dabble in foreign markets, or are a fan gold, there will be a fund for you.
If you’re new to funds, the Fidelity PathFinder online tool can make choosing quick and easy. By answering a few simple questions PathFinder will present you with a choice of three fund options based on your investment aims and the level of risk you are comfortable with.
Or you can take your pick from Select 50, a hand-picked list of funds recommended by Fidelity experts, across different fund providers and sectors, giving you an even better chance of seeing your money grow.
So when it comes to investing in your ISA this year, ask yourself this – do you want to grow your wealth, beat inflation and have the satisfaction of knowing you are no longer reliant on poor cash savings rates? If so it’s time to think about waking up your savings with a stocks and shares ISA.
Emma-Lou is an experienced financial journalist with over 20 years’ experience working in the national and online press. The former editor of Shares magazine and Moneywise and editor-in-chief of Interactive Investor, she has also worked for The Telegraph and the Evening Standard, Bloomberg Business News and BBC Radio 5 Live.
The value of investments and the income from them can go down as well as up and investors may not get back the amount invested. This information does not constitute investment advice and should not be used as the basis for any investment decision nor should it be treated as a recommendation for any investment. Investors should also note that the views expressed may no longer be current and may have already been acted upon by Fidelity. Eligibility to invest into an ISA and the value of tax savings depends on personal circumstances and all tax rules may change. The Select 50 is not a recommendation to buy or sell a fund. Fidelity Personal Investing does not give personal recommendations. If you are unsure about the suitability of an investment, you should speak to an authorised financial adviser.
To find out more visit economia/personalinvesting or call 0800 41 41 28