Advantages & Disadvantages of Tax-Free Savings Accounts

There are typical benefits and drawbacks associated with any account, for example:



Advantages:

• Potential, or guaranteed, high investment returns
• Adjustable levels of investment risk
• Returns are not subject to tax deductions
• Flexible saving options – often no minimum monthly investment
• Opportunity for regular investment
• Opportunities to save on behalf of children
• No fixed investment period for ISAs

Disadvantages:

• Money often not instantly accessible
• May be restricted by minimum and maximum investment values
• Usually costly penalties for breaking investment terms, especially making withdrawals during the investment period
• Riskier options, such as a stocks and shares Child Trust Fund, may result in losses
• May involve complicated terms and conditions