50k ISA Savings Noob Question

I have 50k to deposit in a savings account with Yorkshire Building Society (already with them and very happy).

Do I pick the Cash ISA account @ 3.90% interest or the standard savings account @ 4.90% interest?

It’s worth noting that I may only be living in the UK for another 3 years, but wanted to make my money work for me before I go.

My calculations are as follows:

I’d earn £6081.12 with the cash ISA account but £7716.03 with the standard account. However as a basic income tax payer I’d pay £1543.21 tax on the interest from the standard account, but this still means it’s not worth having an ISA.

Is that extremely basic calculation about right in terms of the inference made?

Thank you!


  • You can only put £20,000 of new funds into a cash ISA each tax year.

    You may want to rethink your plans.
  • If you're determined to only use YBS, and those are the only 2 suitable accounts, then whatever your position with other savings interest, getting 80% of 4.9% (ie 3.92%) will always be better than 3.9% in the ISA. So there's no point in putting any of it in the ISA. 
  • refluxer
    refluxer Posts: 2,539
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    edited 20 December 2023 at 11:04PM
    Which Yorkshire BS easy access is paying 4.90% ? Is it one you already hold ? If not, then the best easy access account I can see at the moment is the Internet Saver Plus Issue 14 @ 4.80%.

    Also - don't forget to include your £1,000 PSA in your calculations... or has that been used up by interest on other savings ?

    There are currently quite a few easy access cash ISAs paying over 5%, so £20k of your money will be better off in one of those than either of your Yorkshire BS options.
  • Bigwheels1111
    Bigwheels1111 Posts: 2,254
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    edited 21 December 2023 at 9:28AM
    Nice way to not maximise your money

    The best rates today for 3 years are 5% fixed and 4.87% isa.
    30k at 5%.     = £1,500 interest taxed at 20%.
    20k at 4.87% = £   974 isa tax free
    Total £2,474

    If you earn under 50k, you would get £1,000 PSA.
    £1,500 - PSA £1,000 = £500 taxable = £100 so £400 left.

    Thats £1,400 + £974 = £2,374 after tax etc.
    Best rates today. I picked Gatehouse bank, Hanley is old fashioned and is an in person or post account.
    Gatehouse is online and app, I have, easy access, regular saver and fixed rate with them.

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