24th January 2024

ISA vs. GIA – which one to choose?

When you want to invest money in the stock market, you need to open an account to do so. There are different types of accounts in the UK, which come with different benefits and rules.

The main two accounts for investing are Stocks and Share ISAs and GIAs. Let’s look at both.

Known asStocks and Share ISAGIA
Full descriptionStocks and Share Individual Savings AccountGeneral Investment Account
What can you invest in?Stocks, Bonds, FundsStocks, Bonds, Funds
What taxes do you pay on the returns (capital gains)?You pay no taxes at allYou pay Capital Gains Tax on any amount above £6,000
What taxes do you pay on the returns (dividend)?You pay no taxes at allYou pay Income Tax on any amount above £1,000
Is there a limit I can put in?You can only put £20,000 per tax year across your ISAs (for the 2023/24 tax year)You can invest as much as you’d like
Can I take money out?Yes, at any timeYes, at any time
Who is this for?If you haven’t contributed to another Stocks and Share ISA this year, or you haven’t reached your maximum allowance of £20,000, then an ISA allows you to not pay any taxes on your returns!A GIA is great if you have already maxed out your £20,000 allowance this year and would like to invest more.

With the information above, we hope you find it easier to decide which account is most suitable for you and your situation.