What is the difference between cash and stocks and shares ISAs?

Can you explain the difference between cash ISAs and stocks and shares ISAs?

Sure! A cash ISA is a savings account where your money earns interest tax-free, while a stocks and shares ISA allows you to invest in stocks, bonds, and funds, potentially offering higher returns but with more risk.

Which one is safer to invest in?

Cash ISAs are generally considered safer because your capital is protected and you earn interest. Stocks and shares ISAs can fluctuate in value, so there's a risk of losing money.

What are the tax benefits of each?

Both types of ISAs allow you to earn interest or returns tax-free. However, with cash ISAs, you avoid tax on interest, while with stocks and shares ISAs, you avoid capital gains tax on profits.

Can I transfer my cash ISA to a stocks and shares ISA?

Yes, you can transfer your cash ISA to a stocks and shares ISA without losing your tax benefits, but make sure to follow the correct transfer process.