COMPARING TAX FREE SAVINGS AGAINST TAXED SAVINGS

Moots2024

Forgive me fellow Forum users. I am Sunday afternoon brain dead on something that I think should be straightforward.

Please take the scenario as read(I appreciate I may be missing options to make it different). The scenario is that I am trying to compare interest on savings that would be subject to tax against an alternative of savings that would be tax free. Accept if you will that said interest on those savings would be subject to 20% income tax if taxed.

Is there a simple formula/table for determining whether interest subject to tax will provide a better net yield than interest which is tax free? I feel sure there will be a formula or table that will provide easy answers but as I say I feel brain dead right now.

Any easy answer(s) out there?

BrilliantButScary

https://www.moneysavingexpert.com/savings/savings-calculator/

kimwp

If the interest would be taxed at 20%, then you can multiply the savings interest rate by 0.8 to get the effective post tax rate.