Cash ISAs vs Stocks and Shares ISAS – which one should I invest in?

Many people we meet with come to us for advice on their ISAs.  The majority of the time they have number of Cash ISAs which at some point was providing them with a much higher return than they are getting now!  Interest rates were reduced in August last year to 0.25% and so the returns on Cash ISAs are now very poor.

Cash ISAs

Cash ISAs will provide you with tax free bank interest and with rates as low as 0.25% in my opinion it really doesn’t matter if there is tax or not as the interest rate is so low to start with!

Many people invest in Cash ISAs because they represented ‘no risk at all’ and/or people seemed to think that putting their money into a Stocks and Shares ISA would be far too risky but this of course depends on the type of risk you select for your Stocks and Shares ISA! There are ‘low risk’ Stocks and Shares ISAs as well as ‘higher risk’ ones.

Stocks & Shares ISAs

At CFG we provide advice on Stocks and Shares ISAs and we ensure that your money is not invested in the same type of investment funds i.e. not putting all of your eggs into the one basket. We do this because having a spread of investments reduces risk for you.  We also offer quarterly monitoring on your investments as well as an annual valuation and rebalancing report and meeting (subject to certain terms and conditions).  Low risk does not have to be a Cash ISA.  Stocks and Shares ISAS do have more risk that Cash ISAs but the returns reflect this.  A typical ‘low risk’ Stocks and Shares ISA could expect to achieve an annualised return of about 4% p.a.

Please contact us for a free telephone discussion to see if we are able to assist you and help you achieve a better return on your money.


This material is for information only and does not constitute investment, tax, legalor any other form of advice.  You should not rely on this information to make or refrain from making decisions.  Always obtain independent professional advice for your own situation.  CFG Financial Advisors Ltd. is regulated by the Financial Conduct Authority.