Skip to content

Cash ISA vs Investment ISA:
Which is best suited to you?

If you’re choosing between a Cash ISA and an Investment ISA, there are a few things to factor in.

Keeping your options open

Both types of ISA are tax free, so no matter which you choose, there are many advantages to putting money into a Cash or Investment ISA.

Plus, it doesn’t have to be ‘either or’. Every year you have an annual ISA allowance that you can use whichever way suits your goals best. This could be saving or investing in one type of ISA, or by splitting your ISA allowance across Cash and Investment ISAs.

Depending on how long you want to wait before accessing your money, and your attitude to risk, one of the options (Cash ISA or Investment ISA) might suit you better. You can learn more about that below or take a look at the range of Investment ISAs we offer.

How long do you wait before accessing your money?

Depending on your needs, you might be prepared to wait longer. Which best summarises your goals?

Attitude to risk

Generally speaking, the higher the potential risk, the higher the potential reward. But you should choose a level of risk you’re comfortable with and best suits your circumstances.

Cash ISAs are traditionally viewed as ‘risk-free’ because the balance of your account will never decrease (provided you don’t make any withdrawals, of course!). But over a longer period of time, there’s the risk that the actual value of the money in your account could reduce because of inflation, i.e. you can buy less with the total amount.

Investment ISAs, while considered higher risk than Cash ISAs, can offer a broad range of risk-rated funds to help you invest in a way that makes you feel comfortable. For example, ‘With Profits’ funds can offer capital guarantees at the lower end of the risk scale, compared with stock market funds which will rise and fall with the markets. Again, risk is generally reduced with investments over a long term. But there’s the potential that you could get less than you paid in.

At Scottish Friendly, we offer a variety of Investment ISAs designed to make investing easy, with options to suit different attitudes to risk.

Our Investment ISAs

We offer a range of investment ISAs designed to make the most of your tax-efficient allowance and the long-term growth potential of the stock market. Plus you can start from as low as £10 a month.

Learn more about ISAs

If you're new to the world of tax-efficient saving and investing, it can feel like there's a lot to think about. We've a few more guides that can help.

Learn all about ISA limits and the different kinds available, and what might be right for you.

If you're investing for your child, a junior ISA is a tax-efficient way of saving or investing for their future.

Not sure where to start, or how to find the money to save or invest? Our guide takes you through some options available.

Need help?

Top suggestions
    We couldn't find any results matching your search terms.