General Investment Account: What Is It And How It Works 

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When it comes to investing and opening a new investment account, it may be hard to choose the one which suits the best your needs and financial situation. Nowadays, there are several options and accounts to examine before choosing the right one. Among these accounts and investment opportunities, there are GIAs. The acronym GIA stands for General Investment Account, which has been specifically designed to let the holder invest in a great variety of assets according to his preferences, such as shares, funds, bonds, investment trust, EFTs and more. In the United Kingdom, everyone over the age of 18 is eligible to open a GIA. Unlike other investment accounts, a General Investment Account will give you the freedom to withdraw your capital at any time with no restriction. You will also have the chance to transfer money from an existing account to another. GIAs won’t grant you any particular tax benefits: as a matter of fact, most of the people who decide to open one already own an ISA and exceeded the annual isa allowance. If Individual Savings Accounts will let you deposit money without paying any tax on it, they come with a restriction on the amount of money you can deposit. On the other hand, by opening a GIA you will be required to pay contributions according to your economic situation, but you won’t have to comply any kind of restriction on the amount of money that can be deposited. Let’s go deeper into this matter.

Characteristics of GIAs

If you’re planning to open a GIA to embark on a new investment journey or just because you’ve exceeded the annual allowance for ISAs, you should know that you will be able to invest your money in a great diversity of economic areas outside of tax wrappers. Let’s have a look on the other characteristics of GIAs and on the benefits you could get by opening it:

  • You will be able to access your capital at any time 
  • You’ll be able to deposit as much as you want with no restriction
  • You’ll be able to invest in shares, stocks, bonds, real estate, land, EFTs and more and pay contributions according to your tax situation.

However, you should never forget that the money you invest is always at risk. The amount you get will always depend on the performance of your investments, therefore you could always end up getting less than what you deposited. That’s why before opening any kind of investment account you should be prepared to putting your savings at constant risk.

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What are differences between GIAs and ISAs? 

Nowadays, when opening a new account many new and inexperienced investors struggle to choose between a GIA and an ISA. They are two very different accounts with different kind of benefits. ISAs are best suited for first-time investors who want to embark on a new economic path without paying any tax on the money the invest. This kind of account also gives you the chance to save money for you (by choosing a Cash ISA), for your life related purchases and for your underage children. With a GIA you have to pay contributions but you have more freedom when it comes to deposit and withdraw money. As a matter of fact, when opening an ISA you must comply to the annual allowance, which currently amounts to £20.000 per year. With a GIA you won’t have any kind of restriction on the sum that can be deposited. Whichever account you’ll decide is the best for you, always remember to be careful and to wisely plan all of your investments. This will give you the chance to make the most out of every move you make and to minimize risks.

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About the Author

Tobias Simmons is a personal finance blogger born in Ontario and based in Las Vegas, Nevada. He's no Doctor of Science or financial expert but is a self-taught student giving advice for the average peer.