You could earn more from an investment ISA than in a cash ISA, but due to the volatility of the stock market you could lose some or all of the money you invest too.
Our table shows which companies let you use your ISA allowance* to invest with, including the number of funds you can choose from to build your investment ISA.
Pros of investment ISAs
The returns could far exceed the amount you earn from the interest on any cash ISA
You can invest using your ISA allowance making any returns free from income tax
You can diversify your portfolio by investing in several markets
Cons of investment ISAs
You could lose your money if the funds you invest in underperform
Your money is only protected up to £50,000 per firm you invest with under the FSCS
What is an investment ISA?
It is a normal investment that lets you use your ISA allowance to make it tax efficient.
You can use your ISA allowance with any of the following investments:
Investment trusts and Exchange Traded Funds (ETFs)
Offshore funds that invest in non-UK equities, bonds and other assets
You can use stocks and shares ISA performance tables on each investment company's website to compare the previous years' growth before you invest.
Past performance should not be taken as an indication of future growth.
How to choose the right type of investment ISA
If you do not know how to pick the right funds to invest your ISA in, then you could choose an investment fund.
An investment fund is controlled by a fund manager who pools your money in with other investors and takes control of where the money is invested.
If you know how you want to invest your ISA, then you could choose a self select ISA.
It lets you tailor your investment to include individual shares and funds from a wide range of markets.
Investment ISA FAQs
Is my money protected in an investment ISA?
Yes, but only if the investment is registered with the FSCS, then your investment will be protected up to £50,000.
How many investment ISAs can I have?
You can only pay into one investment ISA each tax year, but you can open and pay into a new investment ISA in each future tax year.
How can I track the performance of my investment ISA?
Most let you track the performance online or you could also ask your financial advisor for a valuation if you invested through one. Read this guide for more.
Is a good return guaranteed in an investment ISA?
No, you could lose money in an investment ISA due to the volatility of the stock market.
Can I transfer my cash ISA into an investment ISA?
Yes, but only if the company accepts ISA transfers. There may also be charges for transferring into an investment ISA, find out more here.