Advice on where to put savings of £10,000-£15,000

Ivrytwr3

Put it all on red.

eskbanker

ggb1979 wrote: »

My understanding was that ISA's are generally preferred for their tax benefits over a high interest current account - as a high rate tax payer doesn't a 3% current account become a 1.6% account after tax (or 2.4% for low rate payers) - both of which can be generally beaten / matched with an ISA, plus you have the benefit of building on your ISA pot if you don't withdraw for whatever reason.

Not so - there are some fixed term ISAs above these rates but on a like-for-like instant access basis, all currently available cash ISAs (see http://www.moneysavingexpert.com/savings/best-cash-isa) pay less interest than a 3% current account after tax, never mind the accounts that pay 4% or 5% gross.

The point about the cumulative longer term benefits of having funds sheltered from tax is generally valid though, but, given the increase in annual ISA allowance and the current poor ISA rates relative to current accounts, this benefit has been eroded and hence the prevailing view that cash ISAs are less competitive now than previously.

colsten

ggb1979 wrote: »

My understanding was that ISA's are generally preferred for their tax benefits over a high interest current account - as a high rate tax payer doesn't a 3% current account become a 1.6% account after tax (or 2.4% for low rate payers) - both of which can be generally beaten / matched with an ISA, plus you have the benefit of building on your ISA pot if you don't withdraw for whatever reason.

3% before tax would be 1.8% after tax for a 40% tax payer. Still more than any instant access ISA pays these days. But £9K (per person) can be put into 4 and 5% accounts so even a higher rate tax payer would make significantly more on £10K-£15K from current accounts rather than cash ISAs. If you have a trusted partner, you can more than double the amount that can be held in current accounts.