Updated: February 17, 2020

Investing in Bonds and ISAs

Bonds and ISAs can be viable investments to hep your money grow. Find out how to invest in them the right way in our guide

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Richard Angliss

Author: Richard Angliss - Finance Expert

Updated: February 17, 2020

If you’ve set up an individual savings account (ISA), you may be wondering whether you should take advantage of the opportunity to invest in a fixed-rate bond through your ISA provider.

As a tax-free savings account, an ISA can help you keep more of the earnings made on your investment. And since many ISAs offer an opportunity to invest in a fixed rate bond, it’s worth learning about how you can take advantage of the interest earning potential a bond offers.

In this article, we’ll cover…

Should I invest in an ISA with a fixed rate bond?

Many ISAs give you the option of investing in fixed rate bonds and benefitting from the security of knowing exactly how much interest you’ll earn on your savings. And since the interest earned in an ISA isn’t taxable, you’ll be able to take out all your funds tax free when your fixed bond terms expires.

But the ISA allowance limits how much money you can invest in the ISA each year: for the 2019/2020 tax year this limit is set at £20,000.

So if you’re looking into how to invest your ISA, it’s a good idea to first speak to a financial advisor who can ensure putting your ISA allowance into a fixed rate bond would make the most sense for your situation. Generally, a fixed rate bond is good for long-term low-risk investments where you’re happy to stash away cash for a fixed term.

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Which bonds are best to hold in an ISA?

The terms and conditions of savings bonds vary, so you’ll need to understand what your savings goals are and then match your savings bonds investment with these goals. For example, you might want to stash away your cash for 10 years and let it grow with compound interest until your child is ready for university. In this case, you could look for a bond that offers the highest possible interest rates for a 10 year fixed term.

If you’d like help with finding the right bond to invest your ISA allowance, speak to a financial advisor. An expert can save you time and money by taking you directly to the best deals for your investment goals.

How do I compare bonds and ISAs?

With online comparison tools, you can search through hundreds of online savings and ISA accounts to find bonds and ISAs with the terms you need at the best possible rates. However, an online comparison will only give you a rough idea of terms and conditions. It’ll also fail to provide important details on potential hidden fees or any new or niche ISA market deals.

That’s why experts recommend taking a thorough approach to investing by speaking to a financial advisor who can give you advice that’s tailored to your situation and help you find niche deals or more lucrative bond and ISA offers. People who seek out advice often end up earning more on their investments than they would if they choose a bond or ISA themselves.

How do I find the best ISA bond interest rates?

Fixed-rate interest deals usually vary depending on the length of your investment term, so it’s best to begin the search for the best ISA bond once you have a solid understanding of your long-term savings goals. Online comparison tools can help you do market research to understand general terms and bond interest rates on offer.

However, if you don’t already have significant experience with managing risk and investment expertise, it’s best to seek advice from an expert. Financial advisors can save you countless hours of research and give you peace of mind that you are getting the best possible rates for your needs.

Speak to an expert advisor today!

With so many options for investing your ISA, it can be difficult to understand which fixed rate bond would work best for your investment goals.

A qualified financial advisor can help you find an ISA provider with the right bond investment opportunities. An expert will also know where to look for any hidden fees and can select a provider who offers quality service and the interest rates you want.

Make an enquiry or give us a call on 0808 189 0463 – we’ll connect you free of charge to the right financial expert who has whole of market access and can make your savings work harder for you.

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We can help! We know everyone's circumstances are different, that's why we work with brokers who are experts in investment bonds. Ask us a question and we'll get the best expert to help.

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Richard Angliss

Richard Angliss

Finance Expert

About the author

Richard Angliss has made a career in financial services which stretches over 40 years.

His early career was spent learning about the various financial products and applying them to prudent advice, working for one of the largest life assurance and investment firms. After that he joined the financial services arm of a very well-known firm providing independent advice to their 8 million customers.

For the last 20 years he has been involved in building software solutions that help Advisers and clients work together to achieve good financial outcomes and helping to set up three independent advisory firms. He also has written many articles for financial services publications and provided commentary for newspaper journalists.

At an early stage in his career he realised the great satisfaction that comes with being able to help people achieve their goals and protect their families. “Regulation of financial services has hugely impacted on ensuring people get appropriate advice. The issue these days is access to that advice and just as importantly regular reviews to make sure that everything stays on track”.

With the growing development of online resources such as Online Money Advisor he sees a great future for people to access advice to make their pension and investment work harder for them.  Plus, of course, to ensure they have insurance products in place that will be required when unforeseen events happen.

He knows getting that balance right is crucial to prudent financial planning and the wellbeing of individuals and their families.

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