cash isa

fidd

with the low rate of interest on most cash isa`s would it not be better to deposit this money in a high paying savings account and pay the tax which will leave you a better rate of interest

Lokolo

If you want but then you lose that moneys tax freeness for life.

fidd

cant say i understand the answer but know the meaning of the word LOSE not a word i care for

Lokolo

Basically if you have 5 years of ISAs upto now, you then take it all out and put it in a savings account. 5 years in the future you could have had 10 years of ISAs (earning tax free interest) if you had not have taken out those 5 years.

sheslookinhot

I can understand the OP point of view, but agree with Lokolo that it may be shortsighted to give up the tax free benefits of an ISA. Interest rates will surely rise in the future.

If there is a clear benefit, in a savings account over a CASH ISA, I may however, rather than deposit £3,600 on the 6th April, deposit the money in a savings account and then transfer it to the CASH ISA before the end of the 2009/2010 tax year.

Lokolo

sheslookinhot wrote: »

If there is a clear benefit, in a savings account over a CASH ISA, I may however, rather than deposit £3,600 on the 6th April, deposit the money in a savings account and then transfer it to the CASH ISA before the end of the 2009/2010 tax year.

Thats exactly what I am planning to do

elektra

sheslookinhot wrote: »

If there is a clear benefit, in a savings account over a CASH ISA, I may however, rather than deposit £3,600 on the 6th April, deposit the money in a savings account and then transfer it to the CASH ISA before the end of the 2009/2010 tax year.

That's a good compromise. As a non tax payer I fund it frustrating that most cash isas seem to pay less than gross on other savings account. So I have tended to favour non ISAs and actually took some ISA money out and put in fixed rate bond. Should have looked at fixed ISAs in past but was not aware they existed.

Hadn't anticipated becoming a taxpayer again but the possibility of needing to earn an income is looking likely.