Types of Saving and Investment Flashcards
what is an Individual savings accounts (ISAs)
a savings account that offers tax free interest payments
give 2 advantages of ISAs
Interest rates are slightly higher than in other saving accounts
Income tax isn’t charged on interest earned
give 2 disadvantages of ISAs
A
Limit on how much money can be placed in an ISA
Notice required to withdraw funds, and how often you can withdraw
what are deposit and savings accounts
Accounts where interest is paid on the balance
give 2 advantages of deposit and savings accounts
Interest earned on positive balances
Regular deposits encourage good financial habits
give 2 disadvantages of deposit and savings accounts
most accounts have a minimum balance which, if the account falls below, causes the account holder to incur charges.
interest is taxed
what are premium bonds
investment product issued by National Savings and Investment (NS&I).
when you earn interest or regular dividend income you are entered into a monthly prize draw where you can win between £25 and £1mil tax free
give 2 advantages of premium bonds
easy to access
tax free
Chance to win more compared to interest rates
give 2 disadvantages of premium bonds
Amount invested loses value due to inflation
you wont earn regular income
what are bonds and gilts
give 2 advantages of bonds and gilts
give 2 disadvantages of bonds and gilts
what are shares
give 2 advantages of shares
give 2 disadvantages of shares
