An ISA is an Individual Saving Account in which the UK government allows you to put money in every year and you can avoid paying any income tax on the money earned.
There are several different types of ISA but only one that offers the best possibility to earn money. That’s the stocks and shares ISA. You can invest up to £20,000 in your ISA every year.
Of course, it’s possible to simply let the system move your money according to what it feels is best. But, to effectively use your stocks and shares ISA, you need to be prepared to get involved.
Choose A Good Platform
The first step in effectively using your stocks and shares ISA is to deposit as much money in it per year as you can, up to the 20K limit.
Of course, that means choosing a platform and this is one time when your bank is not your best friend.
A high-quality trading platform will offer you low or even zero platform fees, helping you to get started. They will also have an array of advice designed to help you understand the markets better and make as much money as possible.
Watch The Markets
Of course, all investments can increase and decrease in value. That’s why many people are tempted to go with low-risk funds. However, this won’t get you the returns you have hoped for. Instead, you’ll need to look at what is going on in the markets around the world and decide where to place your funds to get the highest rates of return.
The best thing about your high-quality ISA account is that you can move the funds in part or whole when you want to.
That means you can choose the low-risk option for the majority of your funds and use higher-risk options for the rest. Once you have a better idea of how the market operates you can increase the risk but also increase your earning potential.
There have been many big events in the world recently, such as the global pandemic and the Russian invasion of Ukraine. These are all opportunities for a savvy stocks and shares ISA investor. You simply need to look at how the market is likely to react and which shares will be the winners.
Start Today
To effectively use your stocks and shares ISA you need to start saving today. Even if you can’t afford to put the entire 20K in this year, putting something in will get your investment pot started, allowing you to build for your future.
Don’t forget, while you should avoid doing it, you can take money out of your ISA at any time and you won’t have to pay tax on what you’ve earned.
That means if you have just a small amount of money spare you can add it to your stocks and shares ISA today and start making your money work harder and more effectively for you.
