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What is the difference between an ISA and a unit trust / OEIC?
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An ISA is an individual savings account, into which the government allows you to invest £7,200 (current limit) tax efficiently. The ISA is simply a wrapper that surrounds the investments that you want to hold within it. Both capital growth in the value of your investments, and the income arising from them, are tax free.

Within the Interactive Investor ISA you can hold shares, investment trusts, bonds, gilts, funds (unit trusts and OEICs) and cash pending investment.

Unit trusts or OEIC's are collective investments run by professional fund managers. Interactive Investor offers over 1300 of such funds, that can be chosen online. These can be held within an ISA or SIPP, or held outside a tax wrapper and in an investment account.
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