What is a stocks and shares ISA?
You may associate the term ‘ISA’ with the cash savings account offered by your bank or building society – it stands for Individual Savings Account, and importantly any interest gained within an ISA is free from UK income or capital gains tax.
Stocks and shares ISAs operate similarly to their cash equivalents; however, rather than earning a fixed annual interest rate, your money is invested in a chosen portfolio allowing it the potential to produce a greater return. Stocks and shares ISAs are usually recommended as a long-term investment as this gives them a greater chance of outperforming a standard cash ISA.
