Today, the British Government provides its citizens with many different options intended for investors. One of the most popular ones is the GIA, an acronym which stands for General Investment Account. But what is it really? How is it different from a regular investments account? Let’s have a look at its features and at how it works.
What is a GIA?
A General Investment Account is nothing more than an investment fund designed to provide the account holder with more freedom when it comes to choosing the investments areas. With a GIA, you’ll be able to invest your savings in many different fields and outside of tax wrappers. Today, every British citizen over the age of 18 is eligible to open a General Investment Account and to start investing their money in the manner it deems appropriate and according to their preferences and tastes. The United Kingdom offers a wide range of choices when it comes to investing: today, among the most common assets there are stocks and shares, bonds, commodities, and much more. You can also invest your savings in ETFs and cryptocurrencies, which are growing in popularity among first-time investors and seasoned ones. Thus, opening a GIA will give you the freedom to invest in a variety of fields by also providing you with the possibility to access your money at any time with no type of restriction. On the other hand, by opening a retirement plan, the owner necessarily has to wait until he or she reaches their retirement age to be able to access savings. Furthermore, a GIA will also let you transfer your money from another existing account to your new one. However, you should know that you won’t be able to enjoy any kind of tax benefits, but you’ll be required to pay taxes according to your contribution situation.
Consider the risks investing involves
When opening a General Investment Account, you should always take into consideration the risk that comes with any kind of investments. Even though some kinds of accounts can offer many benefits, investing is always hazardous for it can lead to severe economic losses. As a matter of fact, every time you invest your money, the outcome will always and solely depend on the performance of investments, and thus on factors such as the market’s volatility, fluctuations, and more.
GIA vs ISA: what are the differences between these two accounts?
If you’re new to this kind of matters, you might be struggling to figure out which are the differences between GIAs and ISA. However, you should know that they are two very different types of financial accounts. In fact, a General Investment Account is specifically suited for investing, whereas an ISA is a special kind of account intended to give you the freedom to choose whether to save or invest your money. An ISA is an Individual Savings Account which, unlike a GIA, comes with many tax benefits. For instance, you won’t be required to pay tax on the money you save or invest. On the other hand, you’ll have way less freedom when it comes to deposit your money. In fact, an ISA is subject to the annual ISA allowance, which refers to the highest sum you can deposit in a year. This value is currently up to $20.000 per year. A GIA, on the other hand, comes with no limit on the maximum sum you can deposit or invest. Today, there are many different ISAs which let you put your savings aside or to start investing in stocks, shares, bonds and more. You can also open a special kind of ISA that will help you save money for your sons and daughters.
