Fixed Rate Isa or Fixed Rate Bond

Lee_T.

I have 60k sat in an cash isa making just 1.2%. My question is am I better off moving it to a fixed rate bond or will I pay tax on it making the financial gain meaningless?

masonic

£60k could earn 1.5% instant access or over 2% fixed for a year or more. Most of that interest would be tax free if you are a basic rate taxpayer with no other savings. Or you could use a shorter term fix or notice account in conjunction with a flexible cash ISA to preserve the ISA status of the money while earning more interest outside the ISA.

Dazed_and_confused

A lot depends on your tax situation and what other income you have.

Some basic rate payers can have upto £5,999 interest taxed at 0% so you could potentially earn several times as good a return and not have any tax to pay on it.

Most can have £1,000 interest taxed at 0%. So there could be a small amount of tax to pay on a 2% return.

jimjames

Unless you're prepared for loss of your capital just make sure that it's a FSCS protected product whichever one you choose