What is the difference between a savings account and an ISA

tarmeetsb

I'm really new to all of this banking malarkey, I've gathered some money from bank overdrafts ect and I now want to put it into a high interest account so it will just make as much money as I can, but I have no idea which type of account I should choose, I browsed through the recommended ISA's on this website and settled with Icesave's 6.1% AER ISA, But now I've found a 6.5% AER with ING Direct for a direct savings account.

I just need clarification on which type of account would be the best for me. To put it simply all I am looking for is an account to which I can gain immediate access easily and for it to have the highest possible interest rate.

Any help will be appreciated, thanks!

Lokolo

ISAs are tax free.

If you are a tax payer any interest earnt in a normal savings account is subject to 20% tax (or 40% if a higher tax payer).

Wiggynut

tarmeetsb wrote: »

I'm really new to all of this banking malarkey, I've gathered some money from bank overdrafts ect and I now want to put it into a high interest account so it will just make as much money as I can, but I have no idea which type of account I should choose, I browsed through the recommended ISA's on this website and settled with Icesave's 6.1% AER ISA, But now I've found a 6.5% AER with ING Direct for a direct savings account.

I just need clarification on which type of account would be the best for me. To put it simply all I am looking for is an account to which I can gain immediate access easily and for it to have the highest possible interest rate.

Any help will be appreciated, thanks!

you can't take money out of the isa and then put it back... whereas you can with the savings account.
it depends on how much you want to save really and if you will be using it?
could try having both if you have enough to save that is

melancholly

if you are a student, you get gross interest rates on your savings account, which can often make them better than an ISA. however, your tax free ISA will be the best deal long term to save up as you will still get a good interest rate on your money when you are earning. obviously, this depends on whether you will be using up your savings during the year.

here's some more info on what an ISA actually is:
http://www.moneysavingexpert.com/savings/best-cash-isa