Choosing an investment account

Learn all about the four different investment accounts available with Dodl.

Authored on
24 Nov 2022
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Category
Getting started
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Read time
  5 minute read

When you invest with Dodl you’ll be doing it through an investment account – so you’ll need to open one before you can start investing. There are four to choose from and, if you’re eligible to open all four, you could invest through one of each. They all differ slightly in how you can use them, so it’s important you know all about them before you choose the one(s) for you. Here we chat through exactly what an investment account is, then dive into what your options are with Dodl, to help you choose the right account for you! 🙌 

What’s an investment account? 🤔 

An investment account is like a savings account, with a key difference: you can use the cash you save to buy investments – like funds and shares. Investment accounts are meant for those looking to buy and hold onto their investments for a long time (minimum five years ideally), with the aim of growing their money while it’s invested. That’s why investment accounts are best used as a long-term option. And savings accounts are typically a better short-term option, because you can usually get to your money easily and without as much risk of it losing value over the short term. 

While savings accounts are offered by banks and building societies, investment accounts are available with investment platforms, like AJ Bell. And now investment apps, like Dodl, are making investment accounts easier than ever to manage, anywhere and anytime. 👌 

Another thing about investment accounts is they come in a few different varieties: investment ISAs, lifetime ISAs, pensions, and general investment accounts are the big names (all offered by Dodl!). The reason so many options exist is because different investment accounts can be used in different ways and may have different purposes. Take a pension for example, it might as well be called a ‘retirement investment account’ as it helps you save and invest for all the good things later in life (you can currently access pension savings from your 55th birthday but that’ll increase). Certain investment accounts, namely ISAs and pensions, also have tax benefits which set them apart. But with those benefits come some restrictions on who and how they can be used – more on this later (see ‘tax wrappers’). 

One last point about investment accounts, promise! Just as you can get kid’s savings accounts, you can also get kid’s investment accounts e.g. junior pensions or investment ISAs. They’re another option to consider when building up a ‘for uni’ fund or a ‘helping them onto the property ladder (let’s face it, they’ll probably need it!)’ fund for your little one(s). While Dodl doesn’t offer children’s investment accounts, check the other AJ Bell products to see if there’s something there for you. 

So we’re happy about what an investment account is, now what types can you get with Dodl and how do you choose?? Read on… 

What are your options with Dodl and how to choose 🧐

The options 

You’ve got the investment ISA, lifetime ISA, pension and general investment account (GIA from here on – it takes so long to type! 😩). Dodl is pretty unique in offering such a wide range of investment accounts, only possible because AJ Bell (the investment platform behind Dodl) is already a well-oiled machine in providing all of these options. 

 

Investment ISA
Lifetime ISA

 

Simple, tax-free investing.

Pay in up to £20,000 each year and invest this in your choice of funds, themes, and shares.

Keep it all! With an ISA your investments are allowed to grow free of capital gains tax and income tax.

More on investment ISAs

 

Invest for your first home or retirement

Pay in up to £4,000 each year and you could round that up to £5,000 with the government’s 25% bonus.

Keep it all! With a lifetime ISA your investments can grow free of capital gains tax and income tax.

More on lifetime ISAs

 

Pension
GIA

 

Your retirement, your choices.

Save towards your retirement and control how your savings are invested for your (longest) long-term goals.

Get tax relief on your payments in and your investments are allowed to grow free of capital gains tax and income tax.

More on pensions

 

Invest without limits.

A flexible investment account with no upper limit on how much you can pay in and you can withdraw money anytime.

But unlike an ISA or pension, any growth or income from your GIA investments is taxable.

More on GIAs

Let’s wrap it up: Tax wrappers and how they work 💸 

Now’s as good a time as any to introduce what a ‘tax wrapper’ is. You won’t see this term much with Dodl, because it’s a little jargony for our liking, but its meaning is useful when talking about investment accounts and deciding which to choose. ISAs (inc. lifetime ISAs) and pensions are tax wrappers – the money you save in these accounts is protected from capital gains tax and income tax, so you don’t have to worry about paying tax on any gains your ISA or pension investments make. You can think of them as safely wrapped up away from the taxman! 

❗ On the subject of tax – when you’re choosing your account(s) it’s important to remember that ISA, pension and tax rules apply and can also change in future. How you're taxed depends on your circumstances too, so just be mindful of this. 

How to choose? 🔍

Use the comparison table and ask yourself which account meets your needs? That could mean: Which aligns with your financial goals? Are you looking for investment tax benefits (remember tax treatment depends on your circumstances)? Have you used up your ISA allowance? Always remember, your needs are unique to you.  

Dodl doesn’t offer any advice, but this article is here specially to give all the info you need to make your own account choice with confidence. And remember, you’re not limited to just the one type of investment account, providing your eligible to open them, you can have all four if you like (and if it’s what you need!). 

Comparing the accounts  

See how the accounts compare on some of the most important points below. You’ll have access to the full range of Dodl investments in all of them and they all have the same Dodl charge: 0.15% of the value of the investments. 

 

 
Investment ISA
Lifetime ISA
Who's it for?
  • Age 18+
  • UK resident and citizen
  • Age 18-39 (or 40+ if you've got an existing lifetime ISA you're transferring to Dodl)
  • UK resident and citizen
  • Financial goal: saving first home or retirement
Paying in
  • Max: £20,000 per year across all your ISAs (inc. lifetime ISA). It’s called the annual ISA allowance.
  • Max: £4,000 per year (part of overall £20k ISA allowance)
  • 25% government bonus (max £1,000 per year)
  • Can pay in until age 50
Investment options
  • AJ Bell funds
  • Themed investments
  • Shares
  • AJ Bell funds
  • Themed investments
  • Shares
Tax on investments
  • No capital gains tax or income tax to pay

  • No capital gains tax or income tax to pay
Withdrawing cash
  • Anytime, no charges

  • You can’t pay withdrawn amount back in if you don’t have enough ISA allowance left

  • Cash withdrawn is no longer wrapped safely away from tax!

  • No charge when buying your first home (solicitor instructs this) or from age 60

  • Government withdrawal charge of 25% for any other withdrawal (through the app

 

 
Pension
GIA
Who's it for?
  • Age 18+
  • UK resident and citizen
  • Financial goal: saving for retirement
  • Age 18+
  • UK resident and citizen
Paying in
  • Max: your yearly earnings up to £60,000 (could be less so be sure to check!)
  • Tax relief from government (basic rate = 20%)
  • No maximum
Investment options
  • AJ Bell funds
  • Themed investments
  • Shares
  • AJ Bell funds
  • Themed investments
  • Shares
Tax on investments
  • No capital gains tax or income tax to pay
  • Gains and income are subject to tax
  • You need to declare these on your tax return
Withdrawing cash
  • From age 55 (increasing to 57 from 2028)
  • 25% of your pension is withdrawn tax-free
  • 75% subject to income tax at your usual rate
  • Dodl doesn’t currently offer the option to withdraw your pension, just to build it up
  • Anytime, no charges

Have you decided? 💡

Amazing! You can open your chosen account in minutes in the app. And remember, you’re not limited to just the one account (unless you are because... well... you’re not eligible for another 😬), you can open one of each if you like, if it makes sense for you. 

 

Get started today

 

If you’re feeling more confused than ever about which investment account(s) to choose (hope not!), then check out the website for more Dodl account info, like the full key features of each. If after that you’re still not sure, you might be best speaking with a financial adviser about it. Moneyhelper is a good place to start when searching for a suitable financial adviser. 

🔔 Remember investing carries risk and nothing in this article should be taken as advice - Dodl doesn't give advice, but we do hope the info is helpful!


It's important to know

You have to be solely a UK citizen and resident to open an account with Dodl. If you're not solely a UK citizen but still want to invest, you may be able to open an account with our parent platform AJ Bell. 

The past performance of investments isn't an indicator of their future performance and their value can go down as well as up. This means you could get back less than you originally invested. 

Dodl doesn’t offer any advice so if you’re not sure about the risks involved with investing, you should speak to a suitable financial adviser. 

How you're taxed depends on your circumstances, and tax rules can change in future.