Since 1999, the average Stocks and Shares Isa fund has beaten the average Cash Isa rate in 12 out of 19 tax years.
Over the 2017/18 tax year, the average stocks and shares Isa fund has grown by 4.8% while the average Cash Isa rate was 0.97% over the same period, according to research by Moneyfacts.
- New Innovative Investment Finance Isa pays 7.28% a year
Cash Isas have long been a go-to savings account for people who are looking to take advantage of their tax-free allowance, but since the Bank of England cut interest rates to 0.5% in March 2009 Cash Isa rates and savings rates generally have dwindled.
Over the past year, in particular, savers have been ditching their Cash Isas, resulting in the amount of money.
Richard Eagling, head of pensions and investments at Moneyfacts, says: “The nature of investing in the stock market will always involve fluctuating returns but the long-term performance of Stocks and Shares Isas remains attractive.”
Over the 2017/18 tax year, the best top-performing stocks and shares Isa fund sector was Japanese Smaller Companies, which returned 25.5%, followed by China/ Greater China with 24.7% and UK Smaller Companies with 15.3%.
The best-performing Isa fund was Jupiter UK Smaller Companies with 35% returns.
This article first appeared on our sister website Money Observer.
This article was originally published in our sister magazine Moneywise, which ceased publication in August 2020.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.