You can start a regular savings plan from as little as £25 per month or make a lump sum payment with a minimum of £1,000. Once your account is open, you can put in as little or as much as you’d like, as long as it doesn’t exceed the £20,000 yearly ISA allowance limit.

There are five different types of ISA, and each has its pros and cons depending on your financial goals. 

Stocks and Shares ISA

A Stocks and Shares ISA, also known as investment ISA, is a tax efficient way to save up to £20,000 a year (for the tax year 2023/2024) and pay no income or capital gains tax on your investments in shares, funds, investment trusts and bonds. Different investments carry different levels of risk. The higher the risk, the greater the potential for a higher return. However, it's always important to remember that the value of investments can go down as well as up. 

More about Stocks and Shares ISAs
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Junior ISA 

With a Junior ISA, there is no UK income tax or capital gains tax payable on any returns, so it’s a tax-efficient way to save money for a child’s future.

Each tax year, parents, relatives or friends can contribute in either a Stocks and Shares Junior ISA, a Cash Junior ISA, or both. That is, as long as the total savings across these accounts doesn’t exceed the annual Junior ISA allowance, which is £9,000 for the tax year 2023/2024. You have until 5 April 2024 to use the allowance.

As the child turns 18, the Junior ISA automatically becomes an ISA so that the tax benefits are retained and the child takes full control of the account.

If you’re thinking about opening a Junior ISA for a child, they must be aged 17 or under. The account can be set up by a person with parental responsibility for the child, or the child themselves, if they are aged between 16 and 18.

Child Trust Funds were available to children born between 1 September 2002 and 2 January 2011. However, these have now been replaced by the Junior ISA. This means a child can only have a Child Trust Fund or a Junior ISA, not both. 

More about Junior ISAs 
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Cash ISA

Cash ISAs are considered as lower risk compared to the other types of ISA available. They generally work in a similar way to a savings account. Yet with low interest rates and the effect of inflation, the value of your money may still erode over time. 
Holding a Cash ISA means you won’t pay tax on any interest your ISA earns. You can open a Cash ISA from the age of 16 if you’re a UK resident.

Fidelity does not offer Cash ISAs 

Lifetime ISA 

You can only open a Lifetime ISA if you’re aged between 18 and 40.  You can use a Lifetime ISA to save for your first home or retirement. It allows you to save cash or invest in the stock market (you can even do both) and any interest or investment returns are free from UK tax. 

You can put a maximum of £4,000 in a Lifetime ISA each tax year. For every £4,000 contributed each tax year, the Government will top up your ISA with a further 25% of up to £1,000 per year.  You can only pay into a Lifetime ISA until you’re 50. After that, you can continue to hold money in it - where it will continue to earn interest or investment returns - until you need the money for a home or your retirement. 

Innovative Finance ISA

An Innovative Finance ISA is a type of ISA that lets you use your tax-free ISA allowance to invest in peer-to-peer lending. Peer-to-peer lending is a where you lend money to borrowers and businesses who then pay back the borrowed amount over time plus interest. Any interest you receive on top of the borrowed amount is tax free.

Fidelity does not offer Innovative Finance ISAs

You can only contribute the current tax year allowance to one stocks and shares ISA with one provider, though some of your allowance could go towards a different type of ISA such as a Cash ISA or Lifetime ISA.

See more about how many ISAs you can have