Best stocks and shares Isas 2024

All investing involves the risk of losing money - and any investment that claims to returns are guaranteed is probably a scam.

However, all the stocks and shares Isas listed here are from providers regulated by the Financial Conduct Authority and covered by the Financial Services Compensation Scheme (FSCS).

If you have a dispute with these providers you complain to the Financial Ombudsman Service.

And if these providers go out of business, the FSCS will compensate you by up to £85,000 (the rest of your money should be protected by ring-fencing). 

FSCS protection doesn't cover the value of your investments falling.

Find out more about investment protections and scams in our guide.

Your Isa allowance for the 2023-24 tax year is £20,000. Any contributions you make to a cash Isa also come out of your allowance.

It's also important to remember that - until April 2024 - you can only open one cash Isa and one stocks and shares Isa in each tax year, although you can have more than one of each type in total if you've opened them in different tax years. In April 2024 the limit on Isa openings will be abolished.

You can only contribute to one of each type of Isa per tax year, so even if you have two stocks and shares Isas open, you can only add to one of them (though again, this rule will be abolished in April 2024).

If you want to change provider and then make additional contributions, you'll need to transfer your Isa first.

Where and what you should invest in depends on the following factors:

1. Why you're investing - if you're saving up for a specific goal, you'll want to re-invest any income you receive into buying more investments ('accumulation units' in funds do this for you). If you're looking to draw income from investments, look for 'income units'.
2. Your risk appetite - how much money you're prepared to lose in a worst-case scenario, and how long you're investing for. Company shares prices can go up and down rapidly, but over the long term give you higher returns than bonds.
3. Creating a diversified portfolio - having a range of assets, based in different regions and ideally held with different fund managers, will reduce the impact of market shocks
4. The amount of time and knowledge you have - finding individual companies to invest in takes a long time, so you may be better off investing in a fund, where the fund manager makes the decision 
5. Fund costs - if you're buying funds, check how much the fund manager charges. In general actively-managed funds will cost more than passively-managed funds.

Once you've set yours up, it can be tempting to constantly check in on its performance, particularly given now many investment platforms offer mobile apps.

The danger with doing this is that you'll be drawn into tinkering with your portfolio.

If your original portfolio is set up on a sound basis, you should aim to leave it for the long term, with annual reviews being the sensible way to reassess and make sure your investments haven't strayed too far from your desired asset allocation, then rebalancing if necessary.

This is what a financial adviser would do for you, after all.

If you deal too often, you risk ending up with a list of random investments rather than a carefully considered portfolio.

Yes. Fill out a transfer form with your new investment platform and it will do the hard work for you.

Don't be tempted to sell and move the investments yourself, as they will lose their tax-free Isa status.

There's no limit on the number of Isas you can transfer each tax year, but you can only open one type of Isa each tax year (this rule will be abolished in April 2024). So until then you can only switch to a new stocks and shares Isa provider once in any tax year.

Transferring can take a few weeks, leaving you unable to change your investments. If you've got significant holdings in particular firms, avoid switches immediately before those firms' financial results release dates.

A couple of platforms still charge exit fees if you transfer out, so make sure the move will save you money.

• Find out more: stocks and shares Isa transfers

Yes: most cash Isa providers will allow you to transfer a stocks and shares Isa into a cash Isa.

Before you make a transfer, be aware that this involves your investments being sold and turned into cash. If you sell while prices are lower than usual (such as in a market downturn) this could mean you get less money than expected, or less than you originally invested.

Always let your cash Isa provider do the transfer, which may take several weeks.

If you withdraw the money yourself and re-deposit it, it'll lose its tax-free status.

Platforms like Freetrade and Moneybox offer investing in fractional shares in an Isa.

However, HMRC takes the view that this is not in line with tax regulations, so they may look to recover outstanding tax that would have been paid were the stock not held in an Isa. 

A spokesperson for HMRC said they would first aim to claim tax back from the Isa manager (the platform) rather than the individual investor - but there is a risk you'll have to pay up later down the line.

However, the government announced in November 2023 that it wanted to allow certain fractional shares to be held in Isas and would consult on how to implement this.

You can, but it may not be the best approach as it will be in your name, not theirs. There is an equivalent to the stocks and shares Isa for children: the junior investment Isa.

This is a junior Isa that can hold shares, funds and other investments. It has three advantages over using a stocks and shares Isa to save for your children:

1. It won't affect your Isa allowance as junior Isas get a separate £9,000 annual allowance.
2. You don't have to worry about inheritance tax as the junior Isa is held in your child's name, though they can only access the money when they're 18.
3. They can be cheaper than stocks and shares Isas as some investment platforms offer them for free if you have a stocks and shares Isa.

We've gone into detail about junior investment Isas in our separate guide.