whats best, isa or current account saving?

moneysavinggirl40

isa 2013-14 holds £5780 @ 2.5%. would it be best to max out 2014-15 allowance @2.5%, (40% taxpayer) or to max out 2 classic plus TSB accounts ie.£4000 @ 4.98% each? Anyone work out what's best?

kidmugsy

5% x 0.6 = 3%. 3% > 2.5%.

moneysavinggirl40

kidmugsy wrote: »

5% x 0.6 = 3%. 3% > 2.5%.

what does 0.6 represent? ahh is it what i don't have taxed?

YorkshireBoy

moneysavinggirl40 wrote: »

what does 0.6 represent? ahh is it what i don't have taxed?

0.6 is the multiplier to deduct 40% savings interest tax (20% at source and 20% via your tax return).


Best approach is to maximise your return (if that be current accounts, and I suspect it will) for the next 11 months, and make your "do I subscribe to a 2014/15 ISA?" decision next March...or before if a decent enough product comes along.


However, you may not wish to jump through a few hoops and be content with making less money?

moneysavinggirl40

yep understood, thats what i shall do.