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high interest current account or isa?

Hi, ive got one more payment on my collection of debts and from then on I am able to save money.

At the moment ive got the alliance and leicester 8.5% current account and am wondering if im better off keeping my money here over an isa which will earn up to 6.5%.

Many thanks for your thoughts....

Comments

  • Aegis
    Aegis Posts: 5,695 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    6.5% tax free is the equivalent of 8.125% for basic rate taxpayers, and it comes without the hassle of switching your money in and out of the current account to keep the high rate going. It's even better for higher rate taxpayers.
    I am a Chartered Financial Planner
    Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.
  • wow, thanks for the quick reply!

    8.125%, ill use up the £2500 allowance with my current account then first.

    thanks!
  • Aegis
    Aegis Posts: 5,695 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    rikpotts wrote: »
    wow, thanks for the quick reply!

    8.125%, ill use up the £2500 allowance with my current account then first.

    thanks!
    Just remember to check the terms and conditions. Without a certain amount of throughput, your current account will probably incur charges or a reduced interest rate.
    I am a Chartered Financial Planner
    Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.
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