How to Invest in an ISA
Investing in an ISA is simple – you can set up an ISA account in minutes via a host of online providers.
There are hundreds of cash ISA accounts available from banks and building societies. However, please note Standard Life Investments do not offer cash ISAs.
Those looking to invest in stocks and shares ISAs have access to a huge range of funds online. Investors who opt for a DIY ISA select the funds from the provider or an online investment service themselves. However many investors will construct an ISA portfolio with their adviser, who will invest and make changes on their behalf.
Regular and lump sum contributions
You can invest in a stocks and shares ISA with a lump sum or via regular payments.
For Stocks and Shares ISAs, lump sum payment options are useful, particularly if you want to make a last-minute contribution to your ISA at the end of the tax year. However, regular payments can provide a distinct advantage over lump sums particularly in volatile markets. When you invest on a regular basis you benefit from what is called ‘pound cost averaging’, this means you average out the price at which you purchase each part of your investment. So if you invested a £1,000 lump sum and bought shares priced at £1 each, you'd receive 1,000 shares. If you bought £500 worth of the same shares on a regular investment plan you'd buy 500 shares in the first month.
But if the share price went down to 90p the following month, you'd be receiving more shares for the same money (1,050 shares) as they are now priced lower. Obviously share prices can fluctuate but over time, 'drip feeding' into your ISA can provide benefits over lump sum investment.
Transferring an ISA
You can transfer any existing cash or stocks and shares ISA you have with other companies to Standard Life Investments where they will be held in a Stocks and Shares ISA.
Please note if you want to transfer money you've invested into an ISA this current tax year, you must transfer all of it. There is greater flexibility on ISA investments from previous years - you have the option to make partial transfers to other providers and ISA products.
Your ISA provider may apply restrictions on transfers so you need to check terms and conditions. They may also levy a charge on ISA transfers.