Those who leave their ISA subscription until the end of the tax year will have the usual mad rush to get their investments made by 5th April, which falls on a Thursday this year, and the more organised amongst us will be wanting to get the applications in as early as possible in the 2012/13 tax year.
Putting money into a Cash ISA should be seen as a simple decision. You either have money in your bank account being taxed or you put it in a Cash ISA and have it tax free. There is no extra risk involved and therefore no reason not to do it. Given that interest rates are currently low and the Cash ISA allowance is only half of the full allowance, I would encourage savers to be pragmatic about shopping around. If your own bank is offering a half decent rate and you can get this set up at the click of a mouse via your online banking, consider taking the easy option rather than spending hours shopping around for the absolute top rate. Remember that your time is valuable.
Regarding Stocks and Shares ISAs, it is easy to worry about when the most opportune time to invest might be. This is a natural fear but can lead to inertia. Rather than worrying about this, why not set up a monthly direct debit into your ISA so that your ISA subscriptions go onto “auto-pilot”. This gives you one less thing to worry about.
Finally, don’t get sucked into the fund management groups’ marketing. The billboards often advertise last year’s winner but we all know that performance is no guide to the future. Instead, stick with low cost index tracking funds to keep the cost of investing to an absolute minimum, thus leaving you with a greater share of the stockmarket’s returns.
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