4 - Types Of Saving And Investment Flashcards
What are 2 advantages of an ISA?
Income tax isn’t charged on interest earned
Interest rates are slightly higher than in other saving accounts
What are 2 disadvantages of an ISA?
Limit on how much money can be placed in an ISA
Notice required to withdraw funds, and how often you can withdraw
What are 2 advantages of deposit and savings accounts?
Interest earned on positive balances
Regular deposits encourage good financial habits
What are 2 disadvantages of deposit and savings accounts?
Interest is taxed
Less interest earned compared to borrowing
What are 2 advantages of premium bonds?
Can be easily withdrawn
Chance to win more compared to interest rates
What are 2 disadvantages of premium bonds?
No guaranteed return on investment
Amount invested loses value due to inflation
What are 2 advantages of bonds and gilts?
Regular fixed returns
Spread risk over markets
What are 2 disadvantages of bonds and gilts?
Risk of losing value if the bond falls
Interest won’t be received if the issuer can’t make payments
What are 2 advantages of shares?
Share prices fluctuate, possibly high reward
Additional benefits of being a shareholder
What are 2 disadvantages of shares?
High risk from price fluctuation
No guaranteed return on investment
What are 2 advantages of pensions?
Encourages saving for retirement
Some policies boost employer contributions
What are 2 disadvantages of pensions?
Pension outcome difficult to predict
Moving jobs may mean different policies, less value
