Savings And Investments Flashcards
2 advantages of an ISA
Not charged income tax on the interests or profits you earn
Higher interest rates
2 disadvantages of an ISA
Limit on amount you can put each year
Notice for withdrawal
2 advantages of deposit and savings accounts
(Fixed deposit account)
Variable amount of interest is paid
Fixed deposit account pays a set amount of interest over a set period of time
2 disadvantages of a deposit and savings accounts
Interest is taxed
Notice for withdrawal for a fixed deposit account
2 advantages of premium bonds
Given the chance to win a tax-free cash prize every month
Can be easily withdrawn
2 disadvantages of premium bonds
No guaranteed return on investment
Amount invested loses value due to inflation
1 advantage of bonds and guilts
Receive fixed interest rates
1 disadvantage of bonds and guilts
The value of bonds and guilts can fall
1 advantage of shares
Shareholders can receive dividends based on the performance of the business
2 disadvantages of shares
Shareholder can lose their investment if the company underperforms
Large dividend returns may be subject to tax
2 advantages of pensions
(Paid through national insurance contributions)
Encourages saving for retirement
Employer can contribute
1 disadvantage of pensions
(Paid through national insurance contributions)
Can’t access money until retirement age