What's the difference between a cash ISA and a stocks and shares ISA?
Updated 24 February 2021
Generally speaking, stocks and shares ISAs have better growth potential than cash ISAs, but they are more risky. The tax treatment depends on the individual circumstances of each client and may be subject to change in future. The value of any tax benefits will depend on individual circumstances.
Cash ISAs
A cash ISA works just like a savings account, except you won’t have to pay income tax on the interest you earn. Some cash ISAs will give you instant access to your savings, while others demand that you keep the money there for a fixed amount of time. You can also choose between a fixed interest rate or a variable interest rate for your savings.
Currently we don't offer a cash ISA. Our Stocks and shares ISA has a cash facility with an interest rate set at 0.1% below the Bank of England base rate.
Stocks and shares ISAs
You can choose different investments for your stocks and shares ISA, and many companies offer fund solutions. These aim to make investing easy by offering a package of different investments held in one fund, designed to meet a risk appetite or a particular savings need.
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