Am I eligible for gross interest?

LUK3_3

Hello,

I have just turned 18 and am wondering if I am eligible to receive gross interest on my savings/current accounts? I currently earn nothing, in year 13 of sixth form and live with my parents.

Many thanks.

Lokolo

Yes. Fill in an R85 form give it to bank.

Make sure you tell you bank if you start earning more than your personal allowance (currently £6k/year)

LUK3_3

Ah great, thank you very much for the quick answer Lokolo. Does this also mean that it is pointless for me to take out an ISA presently? I am not being taxed and instant access saving accounts from the likes of Kaupthing Edge and Bradford & Bingley offer higher rates (~6.5% compared to ~6.0%).

Lokolo

Depends how long you k eep the money in for.

If its for 5 years, and you're going to be working in 3 of them. Thats 3 years of taxed interest whereas the ISA would be tax free.

If its only for a year or 2 when you aren't going to be working then obviously savings account tax free with better rate is the wisest choice.