Which savings account

beedmcfc

Hi,

I have been left £25k in my dads will, last time i was able to save, the isa limit was £3k, obviously a long time ago! Which savings account would be best for me, i dont plan to touch the money for at least 12 months.
TIA!

eskbanker

Take your pick from:

https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/
https://www.moneysavingexpert.com/savings/best-cash-isa/

Albermarle

You only need an ISA if you are likely to have to pay tax on interest.
If it seems unlikely you will ever have to pay tax on savings interest, then you can get better rates with a non ISA savings account.
Tax-free savings: check if you're eligible - Money Saving Expert

You may want to consider how to use the money as effectively as possible, rather than just saving all of it . Maybe topping up  a pension, paying a mortgage, spending it on something to remember him by etc.

beedmcfc

Am i understanding this correctly, i dont pay any tax if the interest ive earned is less than £1000?

eskbanker

beedmcfc said:

Am i understanding this correctly, i dont pay any tax if the interest ive earned is less than £1000?

The nil-rate band is £500 if you're a higher rate taxpayer, or you may be able to earn more interest without paying tax if you're a low earner, but in between those then yes, although putting the money in ISAs takes tax out of the equation altogether (albeit with potentially lower net return).

beedmcfc

I definitely dont earn the higher rate, i do plenty of overtime andget between 30k and 40k a year, does that affect tax on interest?

Sorry for all the questions

eskbanker

beedmcfc said:

I definitely dont earn the higher rate, i do plenty of overtime andget between 30k and 40k a year, does that affect tax on interest?

Sorry for all the questions

In which case, as long as interest earned from (non-ISA) savings is below £1K, and doesn't push you above the higher rate threshold when added to your other earnings (which it wouldn't if below £1K), then it won't result in any more tax being payable.

Albermarle

beedmcfc said:

I definitely dont earn the higher rate, i do plenty of overtime and get between 30k and 40k a year, does that affect tax on interest?

Sorry for all the questions

In this case you can earn £1000 per tax year in savings interest without paying tax .
As you can get around 4% for a 1 year fix then with £25K , you will be right on the limit. So your choices are 
Either use a cash ISA for part or all of the money
Don't save the full amount. Use some for other purposes
Pay a bit of extra tax .