Different types of savings and investments

Question 1

Individual savings accounts (ISA)

Answer 1

This type of saving account where the holder is not charged income tax on interest received

Question 2

Deposit and savings account

Answer 2

Interest is earned on positives balances

Question 3

Premium bonds

Answer 3

Chance of winning substantially more than could be earned in interest

Can be easily withdrawn with no loss or penalty

Question 4

Bonds and Gilts

Answer 4

These are fixed term securities where the lended (the individual) lends money to companies and to the government in return for interest payments

Question 5

Shares

Answer 5

Shares involve investment in a business in return for equity i.e. the shareholder becomes part owner of the business.

The shareholder will receive dividends from the company’s profits and will also want the value of the shares to increase.

Question 6

pensions

Answer 6

These are long term savings plans where individuals make regular contributions, called premium payments, throughout their working life.