ISA vs Current Account

I should know this, but I don't so i'm asking :-

I get 3% on my current account with Santander.

I keep the balance above £15K so effectively i'm getting 3% savings rate on my £15k savings.

But I am a basic rate tax payer.

I can only get 2.1% on an ISA, so is that better than 3% less tax?

advice please as my brain is all hurty? :mad:

Comments

  • AndyPK
    AndyPK Posts: 4,241
    First Anniversary First Post
    Forumite
    Your getting 2.37% on you s123 so yeah it's better.

    Leave it there if your going to use the money in the near future.

    If you have no plans then you could put it in an Isa in march for long term investment. E.g nationwide.
  • Archi_Bald
    Archi_Bald Posts: 9,681
    Name Dropper First Post First Anniversary Combo Breaker
    Forumite
    Basic rate tax automatically withheld in 20%.

    3% minus 20% of 3% is 2.4%. Or 80% of 3% is 2.4%.

    Your actual annual return from the 123 depends on whether you pay the full £24 in monthly fees and how much you get in DD cashback.
  • Archi_Bald
    Archi_Bald Posts: 9,681
    Name Dropper First Post First Anniversary Combo Breaker
    Forumite
    AndyPK wrote: »
    If you have no plans then you could put it in an Isa in march for long term investment

    Not the entire £15K in one financial year though.
  • cheers chaps. Looks like I do ok where I am then? I get cashback from paying my bills which more than covers the £2 per month fee.

    once again, thankyou :)
  • xylophone
    xylophone Posts: 44,140
    Name Dropper First Anniversary First Post
    Forumite
    But you might want to consider using your ISA allowance for the year even if at the end of the year - tax free interest might prove a valuable benefit at some stage.
This discussion has been closed.
Meet your Ambassadors

Categories

  • All Categories
  • 342.5K Banking & Borrowing
  • 249.9K Reduce Debt & Boost Income
  • 449.4K Spending & Discounts
  • 234.6K Work, Benefits & Business
  • 607.1K Mortgages, Homes & Bills
  • 172.8K Life & Family
  • 247.4K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards