Individual Savings Account (ISA) vs. Unit Trust

Know the difference between ISA and UnitTrust before you invest.

10:10 05 April 2013

The UK’s economy can be described as highly volatile at times. Since the economic crunch in 2008, a lot of businesses and even individuals have suffered and are still suffering from the result of the recession.

Because of this, investing and saving money became more important than ever. Making sure that you have the money to get you through when the times get tougher will surely give you peace of mind. 

 

There are several investment vehicles that you can choose from based on your investment goals and risk appetite. These include ISAs and unittrusts. 

 

Individual Savings Account (ISA)

 

• This is financial product for people with the purpose to save and invest while getting favourable tax status. The money that you put on you ISA is not subjected to capital gains tax or income tax within holding or upon withdrawal.

• However, this is subject to allowance limit. You have the option of having cash ISA or stocks and shares ISA or both, depending on your goals and risk appetite. 

 

Unit Trust

 

• Unit trust is a collective investment constituted under a trust deed and is open-ended investment. Each fund, which isrunbythe fund manager, has a specified investment objective that determines limitations and aims.

• This is great for people who would like to invest but do not have the know-how and needed experience.