5 things to factor in when selecting a stocks and shares ISA | Fool UK

Once you’ve made the decision to get yourself set up a stocks and shares ISA, your next big step is to decide where to actually open your account.

There are plenty of choices out there, and it can feel a bit overwhelming at times. So, to help you make the selection that’s right for you, I’m going to reveal five things to factor into your decision-making process to help you find the platform that fits you like a glove!

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5 things to factor in when selecting a stocks and shares ISA

Here’s an explanation of five key areas you should think about to help narrow down your choices.

1. The fees and costs

Over the long run, investing costs can make a huge difference to the final size of your pie. Just like your gains can benefit from compound interest, high fees can have the opposite effect.

Brokerages have different structures for calculating costs, so there’s no ‘cheapest’ for everyone.

If you’re just starting out, then it’s worth considering a platform that charges a small percentage fee of your holdings.

But when your portfolio grows, an alternative tactic can make more sense. For example, an account such as the Interactive Investor Stocks and Shares ISA is useful because they just charge a flat platform fee regardless of your holdings.

To have a play around with some different scenarios, check out our brokerage cost calculator.

2. The investments you want to make

Some brokerages only allow you access to certain investments and markets with their ISA.

This isn’t a bad thing if the investments you can pick are ones you wanted anyway. But, you don’t want to be in a position where you have to choose a certain investment because you have no other options.

If you already know what you want to invest in, make sure you check any potential stocks and shares ISA accounts give you access. Or, take a look at one of the bigger platforms, such as Hargreaves Lansdown, with which you can pick from thousands of investments.

3. How you plan to invest

If you’re anything like me, you probably organise a lot of your life through your phone. Nowadays, it’s easier than ever to manage your stocks and shares ISA and invest using your smartphone.

However, not every account gives you the option to control your portfolio with an app. So, if you like the idea of controlling everything at your fingertips, look for platforms that include mobile investing.

You can also flip this the other way. If you prefer to do everything over the phone or on the desktop, then you may want to avoid choosing a brokerage that’s completely app-based, such as the Freetrade ISA.

4. The usability of the platform

For those just starting out, a stocks and shares ISA that’s easy to get to grips with might be important. There’s nothing worse than making the exciting decision to invest, but getting scared away by an overly complex platform.

Luckily there are plenty of options, such as the Barclays Smart Investor ISA, that are designed with beginners in mind.

On the other hand, if you already know the ropes and are looking for somewhere to develop your investing skills, you might prefer something like the IG Stocks and Shares ISA. A platform like this might be a little confusing for beginners, but it provides plenty of trading tools and access to loads of different types of investments for those with more experience.

5. How often you want to invest

The frequency with which you plan to top up your stocks and shares ISA can help narrow down the right account for you.

If you plan to make lots of trades each month, you should consider an account that has low dealing fees or specific benefits for active investors, like the IG ISA.

Similarly, if you only plan to invest a few times or even once a month, there are accounts that will better serve you. Interactive Investor gives you one free trade each month, so this can make the account great value for infrequent investors.

Finding the right stocks and shares ISA for you

With so much choice, it can be hard to pin down the right account. What you first need to do is decide on what the most important priorities are for you.

Once you know this, take a look and compare our top-rated stocks and shares ISAs. We’ve broken them down into specific categories to help you no matter what kind of investor you want to be.

Just remember that all investing carries a level of risk. You may get out less than you put in, so research carefully and don’t overstretch your finances.

Don’t leave it until the last minute: get your ISA sorted now!

If you’re looking to invest in shares, ETFs or funds, then opening a Stocks and Shares ISA could be a great choice. Shelter up to £20,000 this tax year from the Taxman, there’s no UK income tax or capital gains to pay any potential profits.

Our Motley Fool experts have reviewed and ranked some of the top Stocks and Shares ISAs available, to help you pick.

Investments involve various risks, and you may get back less than you put in. Tax benefits depend on individual circumstances and tax rules, which could change.

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