Doing it right to avoid higher tax band and do right by my money?

kiloton

Hi again. I have £75988 and trying to balance things so as to earn as much interest without going into higher tax band. Teetering on edge of paying higher rate of tax, currently on basic. Does this sound like good use of money?

£40000 in ISA paying 5.05%
£20200 in Premium Bonds
£13000 in fixed savings 5.25% earning £656.5

£2788 currently left after investing with monthly pay as normal. I was thinking investing more soon to take me up to £1000 savings allowance and other money for emergencies. Any extra cash could possibly be paid into premium bonds or paying extra into current work pension p/m.

I know this isn't 100% perfect and I could possible find higher rate savings, but it's just to get an idea of myself doing things right financially.

Thank you

EthicsGradient

If you're happy to not access the money until your work pension allows it, then putting money into that is almost always the best option if you go over the higher rate threshold (if there's an extra employer contribution with it, then it definitely is, whether or not you reach the threshold - free money!).

Premium Bonds aren't the best purely-financial option for someone still a basic rate taxpayer, but if you like the 'flutter' aspect, that's fine (you can withdraw in a few days in an emergency).