So you're considering investing in a stocks and shares ISA. Great news - ISA funds can often provide great returns. Before
we get into the detail though, let's start by answering a few frequently asked questions.
The maximum you can invest in a stocks and shares ISA between 6th April 2012 and 5th April 2013 is £11,280. However, anything you save in a cash ISA will be taken away from your investment ISA limit. This means that if you fill your cash ISA to the max, you'll be left with £5,620 to invest in your stocks and shares ISA.
As with any investment, the value of an investment ISA can go down as well as up. Different funds have different risk profiles and it's important to evaluate each fund in detail before investing. Stocks and shares ISAs are generally recommended for those looking to invest for a minimum of 5 years.
Just like adults can put money into both a cash and investment ISA, so can under 18s. The limits are lower with a Junior ISA - £3,600 in total - however they're a great way to start building up a nest egg for your child if you don't already have a Child Trust Fund.
There are a number of ways to invest your ISA allowance. These include investment trusts, unit trusts, individual shares, exchange traded funds and bonds. You can choose the combination of equities in which you invest your ISA.
A great range of ISA providers are available on the market. Some of the biggest names include Legal & General, Fidelity, Barclays, NatWest, Virgin and JP Morgan.
Earnings from an investment ISA are of course tax-fee, however many funds do include initial charges and annual/management charges. Actively managed funds tend to have higher management charges than for example an index tracker fund - this is because index trackers let computer systems do the work. There may also be withdrawal fees depending on where you invest.