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What would earn more interest...
Options
cookney
Posts: 2 Newbie
which would earn more interest?
£5000 in an isa at 2%
or
£5000 in a savings account at 3.5% but interest gets taxed...
someone able to work it out
or is the tax free isa always the best option?
£5000 in an isa at 2%
or
£5000 in a savings account at 3.5% but interest gets taxed...
someone able to work it out
or is the tax free isa always the best option? 0
Comments
-
3.5% after 20% tax is 2.8%.
Are you lazy or just don't understand the maths?0 -
oh its that simple is it... #noob0
-
In the long term a tax free ISA may be better as you can only put so much in each year. It also depends on your tax rate. 40%+ taxpayers would be better off putting the money in an ISA. If you are a basic rate taxpayer then the savings account at gross interest of 3.5% is better (net interest being 2.8%).:footie:
Regular savers earn 6% interest (HSBC, First Direct, M&S) Loans cost 2.9% per year (Nationwide) = FREE money. 0 -
5000 at 2% is 100/year
5000 at 3.5% is 175/year gross, 140 for a 20% taxpayer, or 105 for a 40% taxpayer.0
learn something new everyday! This discussion has been closed.
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