Money tip #28 – How to beat the ISA deadline and save money (even if you haven’t decided which funds to invest in)

The end of the tax year is looming so you need to be quick if you plan on using your ISA allowance. While investing in a cash ISA is relatively straight forward, investing in a Stocks and Shares ISA has the added headache of deciding where to invest. But it is possible to secure the use of your Stocks and Shares ISA allowance AND save money even if you haven’t decided which funds to invest in.

The answer to the aforementioned headache is that most fund managers offer a “cash reserve” facility where you can park this year’s ISA allowance until you wish/decide to invest it in the market. You could even drip feed it into shares later on as opposed to investing the lot as one lump sum.

The one downside is that the interest rate paid on these Cash Reserves is currently as low as 0.1%. But on the plus side when it comes to eventually entering the investment markets you will likely only have to pay a switching fee (Fidelity charge just 0.25%) but no initial charge from the new fund manager.

So depending on your fund choice you could save as much as 4% on your initial investment particularly if you use a discount broker, such as Bestinvest, who has waived their right to any initial commission. (who instead will take a kick back on fund manager's annual management charge)

The NET result is that you can secure the use of your annual Stocks and Shares ISA allowance and save £100's in the long run.

KERRRCHING!!!