Interest paid away

Walkinthewoods

I have an Easy Access Cash ISA. Interest is paid out monthly to an external savings account. As I will pay tax on the external savings account is there any benefit in me keeping an ISA?

Beddie

Yes, because you won't pay tax on the interest from the ISA. You will only pay tax on the interest on the interest! That is, the money in the non-ISA account will earn interest and that is taxable.

Of course, you may well not pay tax anyway, based on your individual circumstances. 

eskbanker

Walkinthewoods said:

I have an Easy Access Cash ISA. Interest is paid out monthly to an external savings account. As I will pay tax on the external savings account is there any benefit in me keeping an ISA?

Are you having the interest paid out because there's no option of keeping it within the ISA wrapper?  If not and you don't need the income for spending then just change the interest instruction to keep it within the ISA, or maybe consider a different provider?  Or, as above, tax may not be an issue anyway....