Can you give me some advice? ISAorMonthly Saver?

lauraf_2

HI, Can anyone give me some advice on which savings account to use?

I curruntly have an ISA with a rate of 5.3% which I ve had for years.

Im thinking of opening a monthly saver with my bank with a rate of 7%.

I can afford only to pay in £25-£50 a month. Which will earn me the most interest?

Thanks - Im not very good at understanding the rates!,

Laura

tom188

Assuming your paying in patterns are the same.

7% is 5.6% at basic rate tax, 4.2% at higher rate tax.
If the rate of the RS in your tax bracket is higher than the ISA then in theory it is better. However the long term tax advantages of an ISA outweigh this.

There are better rates than 5.3% btw.

oldfella

1 save in the best rate regular saver
2 once a year transfer it to an ISA
3 go back to 1

Mike