We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
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.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 351K Banking & Borrowing
- 253.1K Reduce Debt & Boost Income
- 453.6K Spending & Discounts
- 244K Work, Benefits & Business
- 598.8K Mortgages, Homes & Bills
- 176.9K Life & Family
- 257.3K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.6K Read-Only Boards