cash and stocks and shares ISA 2014

hedgehogs_2

Hi
I have read all the guides but think I may be being a bit dim asking this question as I am more confused than when I started!
If I was to start a new stocks and shares ISA and also a cash ISA this financial year do they both have to be with the same provider or can one be say with my bank and the other with a building society? All I am sure about is that from 1st July combined they can hold £15,000.
Thanks for the help.

bowlhead99

hedgehogs wrote: »

Hi
If I was to start a new stocks and shares ISA and also a cash ISA this financial year do they both have to be with the same provider or can one be say with my bank and the other with a building society?

They don't have to be with the same provider. Really, they are very different products and so it's unlikely you'd find the best investment products with the same person who gave you a good cash rates.

As a general rule, banks/building societies do not have particularly competitive stocks and shares investment products, and investment specialists aren't any good with cash deposit products.

So you would use a bank or building society for the cash component and for the S&S component you would go to a stockbroker, an investment platform or in some cases (e.g. investment trusts) direct to the investment manager. There are various threads with summaries of S&S providers.

Archi_Bald

Yes you can contribute to both, a cash ISA and a S&S ISA, in the same financial year, and they don't have to be with the same provider. From July onwards, you will also see some providers offer a combined S&S and cash ISA, though the interest for the cash part will very likely be even more abysmal than it is for stand-alone cash ISAs.

You would typically not go to a bank for a S&S ISA but instead use a discount broker. Halifax Sharedealing is an exception to that 'rule' but they aren't necessarily the best choice - - it all depends on what you are investing in and how often you trade.

Can I be nosy and ask why you would want to fund both types of ISA?

hedgehogs_2

Thanks both. I think I finally get it! I'm just looking at all possibilities for a friend who is not registered on MSE but knows I rely on the site to help me out when stuck

barak

Archi_Bald wrote: »

.....Can I be nosy and ask why you would want to fund both types of ISA?

[Only joking! but...] Can I be nosy and ask why you ask that question? I've invested almost exclusively in PEPs and S&S ISAs myself, but I can understand that some people might want to have both.

Archi_Bald

barak wrote: »

[Only joking! but...] Can I be nosy and ask why you ask that question? I've invested almost exclusively in PEPs and S&S ISAs myself, but I can understand that some people might want to have both.

Why?

I can understand the need to split £15K into short and medium/longer term savings. The latter offers itself to S&S ISAs / SIPPs, but it's hard to understand why anyone would put short term money into a cash ISA when you can get more interest from current accounts, even as a higher rate tax payer.

barak

Archi_Bald wrote: »

Why?

I can understand the need to split £15K into short and medium/longer term savings. The latter offers itself to S&S ISAs / SIPPs, but it's hard to understand why anyone would put short term money into a cash ISA when you can get more interest from current accounts, even as a higher rate tax payer.

It wouldn't necessarily be short term money, but that's a good point, which is made here frequently. It shows how out of touch I am with cash ISAs in general, but I do use one of those current accounts myself!

I suppose there just might be some ultra cautious folk who would move "long-term" cash into an ISA at the end of each tax year in the hope of building up a tax-free fund with higher returns in the future.....:undecided

jimjames

barak wrote: »

It wouldn't necessarily be short term money, but that's a good point, which is made here frequently. It shows how out of touch I am with cash ISAs in general, but I do use one of those current accounts myself!

I suppose there just might be some ultra cautious folk who would move "long-term" cash into an ISA at the end of each tax year in the hope of building up a tax-free fund with higher returns in the future.....:undecided

I can understand someone cautious doing that but if you're taking out a s&s isa already then that would indicate that you aren't ultra cautious and are prepared for some risk.