in ISAs & tax-free savings
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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.
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