Interest rates.

Can anyone explain why the interest on an ISA is always lower than an ordinary savings account.  For example I year fixed rate ISA 1.1%.  Same bank, I year fixed rate savings account 1.4%.    OK, I know the ISA is tax free but why would that affect the rate as the banks do not deduct tax on any of them.  I also understand that the banks have to report the tax to HMRC but that is mainly for the Fixed account.   Thanks.  


  • AlbermarleAlbermarle Forumite
    16.4K Posts
    10,000 Posts Fourth Anniversary Name Dropper
    It maybe you do not need to use an ISA savings account anyway .
    What is the personal savings allowance? (
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