Investment ISAs attract cash ISA investors  Go compare with our comparison table

Investment ISAs attract cash ISA investors

09 March 2010 / by Andy Davies

Investors are 'turning their backs' on cash ISAs in favour of investing in fund and share dealing ISAs, according to research by Interactive Investor.

The online stockbroker has found that the number of investors who have put their money into cash ISAs has fallen from 49 per cent since the 2008/09 tax year to 34 per cent this year.

In contrast, fund ISAs and share dealing ISAs – also known as self-select ISAs – have seen a marked increase in their popularity. This current tax year has seen 43 per cent of take up from investors compared to the last tax year when there was a 28 per cent subscription.

Rebecca O'Keefe, head of investment at Interactive Investor, suggests that low interest rates have forced many investors to seek better returns on their investments.

"The best available rates on cash ISAs are around 2.5 per cent but inflation is currently running at over three per cent. For those looking for income from their investments, cash ISAs are not the place to be right now.

"More investors than ever are looking to the flexibility that a self-select ISA offers, combined with the potential for better returns," she said.

With the ISA season now in full swing, Ms O'Keefe suggests investors are drawn to ISA because of their tax benefits.

"For higher rate tax payers in particular, using all available tax advantages makes sense and ISAs are by far the most popular tax efficient investment according to our users," she said.

Meanwhile, further research by the online stockbroker has revealed that there has been a 40 per cent increase in the number of people buying an ISA direct from a fund supermarket.

Commenting, Ms O'Keefe said: "Investors are increasingly taking investment decisions into their own hands. More and more people now recognise the potential savings they can make by investing direct. And also the increased flexibility and transparency that holding your investments online can give you."

© Fair Investment Company Ltd

 

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', eventAction: 'Account', eventLabel: 'Schroders Monthly High Income' });">Schroders Monthly High Income Fundyes
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Popular monthly income fund that aims to achieve a high level of income whilst seeking to maximise total return through investing in high yielding corporate and Government bonds, together with UK equities. 100% discount on initial charges.
', eventAction: 'Account', eventLabel: 'Henderson Strategic Bond Fund' });">Henderson Strategic Bond Fundyes
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The aim of this fund is to deliver a quarterly income to investors by investing in higher yielding assets, which will include most types of fixed interest securities such as high yield bonds, investment grade bonds and government gilts, as well as having the ability to invest a proportion of the fund in equities. Income is paid to you quarterly.
', eventAction: 'Account', eventLabel: 'Schroders Income Maximiser' });">Schroders Income Maximiseryes
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The Schroder Income Maximiser Fund ISA aims to deliver a target income yield of 7% pa, also providing potential capital growth. Income is paid to you quarterly. 100% Discount off Initial Charges.
', eventAction: 'Account', eventLabel: 'Invesco Perpetual Corporate Bond' });">Invesco Perpetual Corporate Bond ISAyes
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', eventAction: 'Account', eventLabel: 'Artemis Income ISA' });">Artemis Income ISAyes
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', eventAction: 'Account', eventLabel: 'Jupiter Corporate Bond' });">Jupiter Corporate Bond Fund ISAyes
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', eventAction: 'Account', eventLabel: 'invesco perpetual high income' });">Invesco Perpetual High Income Fund ISAyes
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One of the UK's most popular income fund ISAs the Invesco Perpetual High Income has delivered consistently good long term returns through a variety of market conditions. Income is paid to you twice yearly. Up to a 100% Discount off the Standard Initial Fund Charge.
', eventAction: 'Account', eventLabel: 'MandG Corporate Bond' });">M&G Corporate Bond ISAyes
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The M&G Corporate Bond Fund is a conservative ‘blue chip’ sterling fund that aims to produce a higher return than UK government bonds. Income is Paid to you Quarterly. 100% Discount off the Standard Initial Fund Charge.
', eventAction: 'Account', eventLabel: 'Jupiter Merlin Income' });">Jupiter Merlin Income Portfolioyes
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The Jupiter Merlin Income Portfolio fund aims to achieve a high and rising income with some potential for capital growth. Income Distributions are made to you quarterly. 95% Discount off the Standard Initial Fund Charge.
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†† Income payments are dependent upon the FTSE 100 Index.

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