Is an ISA the safest investment?

With the ever-increasing costs of living combined with a global economic downturn, many individuals are striving to find safe investment opportunities. ISAs, short for Individual Savings Accounts, are considered the safest investment options for folks living in the UK. You can use the online tool at to compare ISA rates.

Types of ISAs

Technically, the ISA itself isn't an actual investment. It's more of a tax-free wrapper that you can place around several kinds of investments. The two primary kinds of ISAs are cash ISAs and stocks and shares ISAs.

A cash ISA is like a savings account that allows you to earn tax-free interest. It is a very safe investment opportunity that offers higher interest rates than standard bank accounts.

You can choose an easy access option that allows you to take out your funds at any time, or you can earn a higher interest rate for leaving your money alone for a set time period. Cash ISAs are very low-risk and ideally suited for emergency funds and short-term savings.

A stocks and shares ISA, sometimes called an equity ISA, can be invested in various stocks, shares, trusts, life assurance or bonds. This kind of ISA is considered more risky since returns are not guaranteed. You could even lose money, as the returns are directly tied into the stock market performance.

On the flipside, by taking more of a risk, you could earn higher returns. You also have an experienced fund manager making investments on your behalf. This is typically considered the best ISA option for long-term investing since you have to be prepared to leave your money alone for at least five years.

Are ISAs the safest investment? Many of the UK's financial experts say yes, particularly for working folks. These low-risk, lower reward investments might not be the most exciting investment options, but considering the current economy, security is a good thing.

Similar Investment Options

Our readers in the U.S. also have a few safe investment options. Savings bonds are low-risk bonds backed by the government. They never have the best performance records, but you are guaranteed that you will never lose your money.

Certificates of Deposit (CDs) are also considered one of the safest investment options. You deposit your money in an account, leave the money alone for a predetermined time period and earn a bit of interest on your initial deposit. The interest rates are higher than those for traditional savings accounts.

Perhaps the investment option most similar to an ISA is the Individual Retirement Account (IRA). A Roth IRA allows Americans to save for retirement without having to pay taxes on the deposits or withdrawals.

Homebase is the UKs second largest home improvement retailer and is recognised for choice, style ...
Silver Travel Advisor
Have your say and you could win a Greek Island villa holiday. If you like holidays and ...
For some of the most talked-about TV, get Sky TV. In all, we've 100+ digital entertainment ...
Make a Will Online
Make a Solicitor checked Will Online with Gloss Legal
Travel News
All-inclusive holidays 'offer value for money'
Finance News
Recession 'causing problems for over 50s abroad'
Dating News
Online dating 'can give over 50s another chance at love'

We Luv Sweets
New Zealand Holidays
Kirra Tours 100 Percent Kiwi New Zealand Holidays by New Zealanders. Although larger than the UK, New Zealand has a ...
The only prostate supplement with 100% pure Beta-Sitosterol