Is it possible to get an income from a Saving

hobbis_2

Pardon me but I am a complete newbie to this. I've read somewhere that you can get an income from Equity ISA's. Does this mean I can put money into an isa and literally get a monthly income back from it? Does this replace the interest you would get on say a mini cash isa? This sounds great so what's the catch? Are they risky? Do you have to have a large initial deposit?

Thanks.

LOST

it is possible - going for income funds - high income funds provide around 20% more income than the sector averages.

but going for stocks and shares ISAs means that you will be investing into funds and will also mean that you will be exposed to investment risk - i.e. the value of your investment can go down as well as up!

You can invest upto £7k into a Stocks and shares ISA, or upto £4k if you already have a mini cash ISA.

remember all income and capital growth is tax free within the ISA!

dunstonh

A number of ISA providers (including some fund supermarkets) will pay a regular fixed withdrawal as well.

EdInvestor

There are three main types of funds which pay out income which are available in an investment ISA (7k for a maxi, 4k for a mini pa.).

1.Equity income funds.

They invest in shares which pay a decent "dividend" to shareholders, and this is passed on to you.The value of the fund can fluctuate depending on the market, but these funds tend to do well in a crash, so they are less risky than other equity investments.

2.Corporate bond and gilt funds.

These invest in bonds - aka money borrowed by companies or the Government from investors, who get paid a "coupon", similar to interest on a savings account. They behave more or less in the opposite way from cash.With cash, the capital stays the same but the interest rate can change.With bonds, the interest rate remains the same,but the value of the bonds can change (though not if you hold them to maturity when the debt gets paid back).

3.Property funds

These funds invest in office blocks, shopping malls, and industrial parks.They earn income from the rents payable by the tenants - big companies, shops or factories - of the buildings.That income gets passed on to you. The value of the fund can go up and down depending on commercial property prices.

hobbis_2

Thanks everyone for your replies! The Property funds sound interesting...