There are hundreds of stocks and shares Isas to choose from – and in the run-up to the end of the tax year on April 5 advertising campaigns promising investment excellence jump off the pages.
It can be tricky to sift through the noise and find the best Isa to suit you.
As an experienced investor, I have tested accounts with nearly 30 providers – funded with my own money – to research the market.
Here’s my guide through the minefield to the best Isa options to suit a variety of needs and levels of experience.
For those wanting a little more choice, Fidelity is a big global brand that offers reasonable value and helpful fund shortlists to assist navigation and choice. Minimum fees make it relatively pricey for accounts under £7,500. Above that and the ongoing annual fee falls to 0.68 per cent.
Hargreaves Lansdown is the UK’s largest online investment service. It can be expensive, but its charge for smaller Junior Isas offers good value. There are investment options to suit different levels of confidence and interest. Service is the best around.
Investor type: ‘Save me from myself’
One of the most common mistakes I see from Isa investors is that they have some luck with a particular share or fund, get more interested, trade more and try to time the market.
But timing the market is impossible. Even if you predict events correctly, you cannot assume you will accurately predict how markets will react.
One of the most successful investors ever, George Soros, constantly reminds us that good investing should be boring. The ‘boring’ solution in the Isa world is Vanguard, a US-based investment firm.
It offers the LifeStrategy range, funds providing access to a broad global mix of investments. Opening a Vanguard Isa and using a fund from this range will cost 0.48 per cent a year. Vanguard will monitor, anticipate, tweak and manage the global range of investments for you.
If this removes investment fun, don’t forget you can have more than one Isa. The rules just say you can’t pay into more than one investment Isa in any one tax year. If your enthusiasm may be leading to poorer outcomes why not open a new low-cost, ready-made option next tax year (April 6 onwards) and see which approach does better.
How to find the best and cheapest investing platform
DIY investing platform prices can be chiefly be split into two camps, writes Simon Lambert. Some charge a flat administration charge, while others charge a percentage of investors’ holdings.
The former tend to always charge for buying and selling investment funds, while the latter may bundle this cost in and offer free fund dealing.
All charge for buying and selling shares, investment trusts and other products that are not funds, but the dealing fees vary from as low as £5 to about £12.
If you are a buy and hold investor putting away a large sum of money then you may benefit from a flat fee rather than percentage-based charging, which can mount up to a hefty amount.
But if you plan on buying and selling regularly watch our for dealing charges, as these can also add up substantially and easily erode the gain from a flat fee. Lower charges for regular monthly investing can substantially cut costs.
Read our round-up of the best investment platforms to check the best one for you.