I want to start investing some money I have saved.
I have investigated about this but I'm still not secure about what to do. I have called to my bank to ask questions but they didn't help too much because I hadn't the intention of buying any product they offer, but another one.
These are the steps I have in mind, I would like to confirm whether or not they are correct.
1 - Go to my bank and open a stocks and share ISA, taking into account that the maximum amount I can put in there yearly with tax relief (*) is £20k and its maintenance costs (**).
2 - Go to the funds company (e.g.: Vanguard) and open a brokerage account (since that will make my life extremely easier with regards to buy/sell stocks or ETFs). I guess I will need to provide my ISA's number to this brokerage account so they know where to deposit the hypothetical benefits, is this correct? (***)
3 - Once 1 and 2 are done, go to the funds manager (Vanguard or whatever) and buy the product I want (ETF, fund, stocks...) through the web page. (****)
4 - From here on, I need to check that the costs of the accounts, operations etc. match what I thought, for being sure that I have understood everything correctly.
*To get the tax relief I guess I need to put money (for which I have already pay taxes) in the account and then claim for the tax relief at the end of the tax year through an income declaration, is this correct?
** With regards to the maintenance costs of the ISA, I have read that
You must pay the Account Fee of 0.25% per annum on the value of Fund Shares you hold. That means that if I have £10000 in the account and I earn nothing during a particular year, I would be losing money. Is this correct?
*** With regards to the brokerage account, I guess I should check what are the maintenance costs and how much will by broker get for each operation, right? Can my broker be a robot or something like that?
**** When buying stocks or ETFs, It might happen (or not) that reinvesting dividends is not for free. Is this correct? Is there any other important consideration I should have with regards to 100% predicatble costs?