Where to bank the "emergency pot" of cash

WGPA

I have an instant access ISA which is maturing this month. I have historically held my "emergency fund" in here. Looking on this site and various others it seems current accounts are the way to go.

As a 40% tax payer, is the Santander 123 the best bet for this with a net rate of 1.8%? I already have one set up so it's minimal hassle if so.

Outside of this I have a S&S ISA inveted in VLS80 that I contribute to regularly taking up most of my annual allowance, so I want to double check before taking the cash out of the ISA wrapper.

What is the procedure for paying the additional tax due - is there an "easy" way or is it a case of filing a tax return?

Thanks

jimjames

Depends how much your emergency pot is.

I use TSB getting 5% and Tesco getting 3% but with no fees unlike Santander.

Also down to how many accounts you want or if you prefer to just stick it all in the one with Santander.

Aretnap

Nationwide will also pay 5% on £2500 (for a year) and a Club Lloyds account will pay up to 4% on up to £5000.

http://www.moneysavingexpert.com/banking/compare-best-bank-accounts#interest

You can also drip feed (some of) it into regular saver accounts which pay up to 6%. They also have the advantage that most of them pay interest in a single lump sum 12 months after you open them rather than monthly - and in 12 months time the new personal savings allowance will have come into effect so you'll get the interest tax free.

The best regular savers come linked to current accounts, but there's nothing to say you can only have one current account.

http://www.moneysavingexpert.com/savings/best-regular-savings-accounts

Check the withdrawal terms. If it's emergency cash then presumably you don't want to lock it away for 12 months, but most will let you withdraw it early albeit with some loss of interest - so it's still a good option if you're unlikely to have to withdraw it early.