Vanguard interest rate on cash

where_are_we

Vanguard are currently paying almost 3.1% on cash held in their accounts.See here: https://monevator.com/vanguard-cash-interest/. This is a decent rate for those who hold cash in their SIPP. If you are between 55 and 75, have no earned income and contribute £2880 net (£3600 gross) annually to your personal pension or SIPP and don`t invest and remain in cash (I`m not advocating cash is better than investing in the longer term) this is welcome news.

L9XSS

It’s paid monthly too and hits your account the 1st of the month generally.

RogerPensionGuy

As I understand it, cash in an ISA, SIPP or a GIA get this interest.

Just parking cash in a GIA gets this deal and guessing no tax paid unless interest is over CGT limits.

Mutton_Geoff

RogerPensionGuy said:

As I understand it, cash in an ISA, SIPP or a GIA get this interest.

Just parking cash in a GIA gets this deal and guessing no tax paid unless interest is over CGT limits.

Since a GIA isn't a tax wrapper, wouldn't tax be paid on interest above £1,000/£500 depending on your tax band and whether you'd already used up your personal tax code on other income?

https://www.gov.uk/apply-tax-free-interest-on-savings

RogerPensionGuy

Mutton_Geoff said:

RogerPensionGuy said:

As I understand it, cash in an ISA, SIPP or a GIA get this interest.

Just parking cash in a GIA gets this deal and guessing no tax paid unless interest is over CGT limits.

Since a GIA isn't a tax wrapper, wouldn't tax be paid on interest above £1,000/£500 depending on your tax band and whether you'd already used up your personal tax code on other income?

https://www.gov.uk/apply-tax-free-interest-on-savings

I was thinking in a GIA it would just be capital gain and therefore definitely no tax if under the CGT limits which are IIRC 12K this year, 6K next and just 3K from April 2024.

Maybe others will offer their views on this tax efficiency route?

Pat38493

RogerPensionGuy said:

Mutton_Geoff said:

RogerPensionGuy said:

As I understand it, cash in an ISA, SIPP or a GIA get this interest.

Just parking cash in a GIA gets this deal and guessing no tax paid unless interest is over CGT limits.

Since a GIA isn't a tax wrapper, wouldn't tax be paid on interest above £1,000/£500 depending on your tax band and whether you'd already used up your personal tax code on other income?

https://www.gov.uk/apply-tax-free-interest-on-savings

I was thinking in a GIA it would just be capital gain and therefore definitely no tax if under the CGT limits which are IIRC 12K this year, 6K next and just 3K from April 2024.

Maybe others will offer their views on this tax efficiency route?

Actually I was also wondering about this - if I have a GIA account that is invested in funds like Vanguard or whatever that contain a combination of all sorts of items - bonds / equities with and without dividends on the underlying shares and so on, is all of the growth on that fund capital gain (even though within the fund they might be getting dividends on some of the share investments)?