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Types of savings accounts and investment (Individual savings accountants…
Types of savings accounts and investment
Individual savings accountants
Advantages
Tax is not charged on interest earned allowing saver to keep the rewards from saving
Interest rates are sometimes slightly higher than alternatives
Disadvantages
Notice often required to make withdrawals
penalty may cancel out tax savings
Limited amount can be placed in the ISA
Deposit and savings accounts
Advantages
Interest earned on positive balance
Accounts sometimes require regular deposits
Disadvantages
Interest earned is taxed
The percentage rate of interest paid on savings is likely to be lower than interest to be paid on borrowing
Premium bonds
Advantages
Chances of winning substantially more than could be earned ion interest
Can be easily withdrawn with no loss
Disadvantage
No guarantee return on investment
Maximum amount reviewed annually
The amount invested assuming zero or low returns, loss value due to inflation
Bonds and gilts
Advantages
regular fixed returns
spreads the risk across a range of markets
Disadvantages
Risk of losing some or all of the value of the investments
Interest payments may not be received if the issuer is unable to make payments
Shares
Advantages
Shares price fluctuate offering a potential high rewards
Share holders returns can include divided payments and an increase in share value
Additional benefits including discounts and special offers
past time that creates interest
Disadvantage
Fluctuating prices means potential high risk
Their is no guarantee of any rewards or returns on investments