Normal savings or isa

dibs1975

We are looking to save some money for next year to pay for a wedding. I have been trying to look into the best opition for saving. I've looked at fixed term isa and normal bank savings. I thought Ida's had a better interest rate but natwest for example seem to have a higher interest rate. Could someone please offer some advice incase I'm reading into things wrong and what our best option would be.
Thank you in advance to anyone who comments with some advice.

Idpullthecurtain

Depends on the amounts and your earnings.  If you are saving a lot, you want to use ISA's cos of the tax implications.

eskbanker

You might wish to consider one or more regular savers:

https://www.moneysavingexpert.com/savings/best-regular-savings-accounts/

slinger2

A lot depends on your tax situation. For basic rate taxpayers there's a Personal Savings Allowance (PSA) of £1,000. So you can get that much interest without paying tax (each tax year). Since the non-ISAs generally pay a bit more than the ISAs you could just use non-ISAs if you're under the PSA. If your over the PSA then the ISAs have an advantage over the non-ISAs (since the ISAs are tax free).

Then you need to make a judgement call about whether you want easy access or a fixed rate/fixed term.

dibs1975

We are basic rate tax payers and carears so don't think we will come close to the yearly limit

slinger2

As noted above, regular savings accounts might be the best option.

refluxer

dibs1975 said:

We are basic rate tax payers and carears so don't think we will come close to the yearly limit

MSE's guide to the starter rate for savings might be worth a read : https://www.moneysavingexpert.com/savings/tax-free-savings/

If you earn under £17,570 as income from a salary/pension, you can earn up to £18,570 in combined income and savings interest without paying tax on it. If you earn between £17,570 and £50,270 from a salary/pension, you get a tax-free allowance of £1000 for savings interest and any interest you earn above that figure will be taxed at 20%.

Broadly speaking, a cash ISA is of the most benefit when you pay tax on your savings interest - if you don't (and don't think you're likely to in the near future) then just go with whichever rate is the higher, whether that's an ISA or normal (non-ISA) account.

If tax on interest isn't a concern and you want to put money away on a monthly basis, then a regular saver (as recommended above) will generally get you the best return - just be sure to read the T&Cs for any closure or withdrawal restrictions as these can vary from one account to another.