MINI AND MAXI ISA GUIDE |
|
It's very important
to understand the differences between Maxis and Minis because each year you are
only allowed to invest in one of the two types. You already know that there are
three components to the ISA - cash, shares and insurance. This is how you can
use them in a Maxi:
The
Maxi
Three components:
Think of the Maxi
like a big teapot with three different types of teabag in it. These are teabags
of varying strengths and tastes that you can choose according to your fancy, more
or less, but they all go into one single teapot. You will appreciate that if you
put all three types into one teapot that you can only have one person be Mother.
In other words, only one financial organisation can run your Maxi ISA for you.
The Mini
Three components:
This time, think
of three little teapots, each with its own teabag. This means, of course, that
you can choose three different people to be Mother with whatever type of teabag
you fancy. So, if one organization is offering great interest rates on their Cash
Mini but you don't like the charges on their Shares Mini -- that's okay. Open
their Cash Mini ISA and go to someone else for your Shares Mini ISA.
The important thing
to remember - and it's so important we're going to repeat it - is that you are
only allowed to take out one type of ISA each year. So if you open a Maxi this
year then you're not allowed to have one of those cute little Minis as well. Or
if you open just one of the cute little Minis you can't then decide you want a
Maxi too. It's one or the other - until the next tax year when you're allowed
to either continue with what you've already got, or start afresh.
It's entirely up
to you whether you opt for the Maxi system or the Mini system. The Maxi is advisable
for people who have larger sums to invest (over £3,000) and who have some
knowledge of the stock market, as it allows them to put all their ISA allowance
into investments each year - more on this later.
Minis are probably
better if you are thinking of investing less than £3,000, as you are then
free to go to other providers to ensure you can get a good rate on the cash component
of your ISA.
ISA
guide
How much can I invest in an ISA
Mini and Maxi ISA guide
CAT standard ISA guide
Cash ISA guide
Share ISA guide
|
