Which account is good to add funds? ISA or basic account

Hi please help me which account is good for buying shares ISA or Basic account?

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ISA is a better if you plan to use it in the long term - all dividends and gains are tax free forever. However, there is a £3 monthly fee associated with an ISA (which will be applicable as of July 2019).

You can read more about ISA’s benefits in one of Freetrade’s blog posts:

And even more about taxation issues in another post :slight_smile: :


Am I right in thinking it’s only really worth switching over to the ISA if you are earning more that £3 a month from the portfolio.

Or actually is it if you are currently paying more than £3 in tax each month.

Earning £3 a month would cover the costs so thats one way to look at it.

The way I look at it you do have a large amount of dividend income and capital gains you can claim in a year free of tax without it being within the isa. The trouble is noone knows if or when the government will change those generous allowances.

If you’re building up your portfolio in the long term it may be a good idea to see how you get on in the first year and then opt for the isa when you know a bit more about your portfolio size.

Alternatively, getting in an isa earlier will save you the hassle of switching further down the line but other on the forum have done some sums on this topic to help too.


Essentially the point is to not pay tax, so you would indeed switch to the Freetrade ISA when your taxes would be more than £3/month.

Many would want to switch before their portfolio reached the 1-year ISA max of £20k, so they don’t have to worry about being able to get everything in to the ISA. It’s also about this time that you might become concerned that your captial gains could exceed your CGT allowance.

It depends on how much you’re investing. Small amounts (well under £20k/year) can use the basic account, at least for the 1st year. Higher amounts can then switch to the ISA.