ISA and GIA: What Are They?

ISA and GIA: What Are They?


Today, UK citizens have a wide choice when it comes to choosing an account for their new investment journey. As a matter of fact, there are different options available, and each one may or not be suitable for a certain profile of saver or investor. Among the most popular of accounts there are ISA and GIA, which have different characteristics, so the choice will depend on the holder’s profile, risk tolerance, needs and goals. A GIA is a General Investment Account intended for investments, for it has been specifically designed for those who are willing to take the risks related to the market’s volatility. What does isa stand for? ISAs are Individual Savings Accounts that give the holder the chance to save or invest money according to his or her needs and preferences. Moreover, there are many types of ISAs in order to meet the needs of as many people as possible. Whichever account the holder would choose, he or she should always keep in mind that investments are risky. In fact, although investing could represent a solution to generate economic growth, the money will be at constant risk. As a consequence, the risk of getting less than expected is always around the corner and the market’s fluctuations makes the outcome of every investment unpredictable.  But what are the main features and differences of these two types of accounts?

Individual Savings Account

Individual Savings Accounts represent a new way to save or invest money according to the holder’s needs. It is indeed a really popular account among new investors who want to embark on a new economic adventure. By opening an ISA you’ll be granted many tax and contribution benefits: in fact, these accounts have been created to work in a tax-efficient way. This means that when you put your funds on an ISA, they will always be protected from UK taxes. Also, you’ll be able to choose whether to just save your money or invest it instead. If you intend to start an investment journey, you’ll be able to choose between many different types of ISAs and invest in a great variety of fields. As a matter of fact, while a Cash ISA resembles to a regular savings account and a Lifetime ISA is designed to save for life-related purchases, there are many other types intended for investments, such as the Stocks and Shares ISA and the Innovative Finance ISA. You can also open a special kind of account to build a savings pot for your underage children called Junior ISA. When it comes to ISAs, you should remind that whichever type you choose you will have to comply with the annual allowance, which amounts to £20,000 per year for all accounts except for the JISA, whose allowance is up to £9,000 per year.

General Investment Account

On the other hand, a GIA is a General Investment Account which has been created specifically for investments. When opening one you won’t be granted with particular benefits, as you will have to pay contributions in accordance with your tax situation. However, GIAs come with no restriction on the maximum amount that can be deposited in a year and it give you the freedom to withdraw and deposit as much as you want. With a General Investment Account, you’ll be able to invest in a great variety of fields outside of tax wrappers, such as in shares, stocks, bonds, land, real estate, EFTs, cryptocurrencies and more. While an ISA might be suitable for first-time investors or savers who are starting a new economic journey, a GIA might be more suitable for those who already have some experience in the sector or those who already have an ISA and exceeded the annual allowance.