Investment is a big decision and one that should be considered and researched thoroughly prior to making any financial moves. A good starting point when considering your investment options is to look at the types of investment opportunities available to you, as well as which investments might be best for your financial goals.
There are many types of investment, each delivering a different type of experience and result. A few of the most basic types of investments include ISAs (Individual Savings Accounts), OEICs, and savings plans.
Initially, there were three types of ISAs: Mini ISAs, Maxi ISAs and TESSA-only ISAs. However, new TESSAs could not be created after Aril of 1999 – meaning the required five-year term of all TESSAs all ended by April 5, 2004 – and the distinction between a Mini and a Maxi ISA was abolished in March 2007. All ISAs were reclassified as either a Cash ISA or a Stocks and Shares ISA – both types of which will be available indefinitely, with no set end date.
The benefits of ISAs, however, remain the same. ISAs enable investors to protect some of their investments from tax – investments which can be cash only or include various financial products such as bonds and shares. Essentially, anything invested in an ISA won’t be liable for income or capital gains tax. All UK residents aged over 18 years are entitled to invest in an ISA.
OEIC’s (Open Ended Investment Companies), however, enable investors to buy or sell shares in a company, with pooled funds managed by professional fund managers. The primary advantages of investing through an OEIC are that investors’ dealing costs are lower, and investors benefit from lower risk due to their investments being spread across many companies instead of just a few.
Finally, a saving plan investment is a basic way to save on a regular basis. Investors can save a given amount on a monthly basis as well as top up their accounts with lump sums. It’s also possible to invest on behalf of someone else – such as your child – by opening a savings plan under multiple names, or solely for another person.
ISAs, OEICs, and savings plans are just a few of the many ways you can choose to invest your money. So research your options, and pick an investment opportunity that’s right for your financial needs and goals.