Cash ISA vs Investment ISA. Which way to go?

Torn between a Cash ISA and an Investment ISA? Here’s some of what you need to know.

isa savings

Keeping your options open

Both offer tax advantages, whether you choose a Cash ISA or an Investment ISA. 

And guess what? You don't have to pick just one. Your annual ISA allowance means you can choose what suits your goals best. Save or invest in one type of ISA or split your allowance across a Cash ISA and Investment ISA. Please note that Scottish Friendly do not offer Cash ISAs.

Check out our range of Investment ISAs for more information.

Remember, stock market investments can go down as well as up, so you may get back less than what you've paid in. Tax treatment depends on individual circumstances, and tax laws may change.

Cautious about cost ?

It's important to be aware of any additional charges associated with Cash ISAs or Investment ISAs. Some Cash ISA providers may charge for early withdrawals, while Investment ISA providers may have fees for early exits, annual management, platform use, or dealing.

How long do you want to wait?

An Investment ISA might be right for you if you're planning ahead and willing to wait for 5 to 10 years or more. It offers long-term growth potential through the stock market.  

Just keep in mind that the value of your investments can fluctuate, so you might get back less than you paid in.

For short-term goals (say, less than 5 years), a Cash ISA could be a good option. 

While it won't have short-term losses, remember that inflation can impact the future value of your money. The interest rate and charges on your Cash ISA account will determine your gains.

Finding your comfort zone

Cash ISAs are often considered "risk-free" because your account balance won't decrease - provided you don’t make any withdrawals, of course!

You can choose from options like for example "With Profits" funds which can offer capital guarantees or stock market funds which can rise and fall with the markets . These are just some of the options that we offer at Scottish Friendly.

Generally, investments over the longer term could provide greater potential for growth, but there's still the possibility of getting back less than your initial investment.

Our Investment ISAs

At Scottish Friendly, we offer a variety of Investment ISAs designed to make investing straight forward.

Explore them now. Investments start from as low as £10 a month.

Learn more about ISA limits, the different types we offer, and what might be right for you with our Friendly guides.

Consider a Junior ISA for tax-efficient options if you're saving or investing for your child's future.

Not sure where to start or how to find the money to save or invest? This guide provides helpful insights into your available options.

Tax treatment depends on your individual circumstances and tax law may change in the future.

Scottish Friendly doesn't provide advice. The information provided should help you decide if a saving or investment plan is suitable for you. If you're not sure whether a saving or investment plan is suitable, you should contact an independent financial advisor for advice. Advisers may charge for providing such advice and should confirm any cost beforehand.