Save Hundreds of Pounds a Year! - Savings - News - Moneyfacts

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Save Hundreds of Pounds a Year!

Save Hundreds of Pounds a Year!

Category: Savings

Updated: 31/10/2008
First Published: 05/03/2007

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The difference between a top paying cash ISA and a high street current account can be as much as £172 a year in interest for basic rate tax payers.

Our research shows that the difference in interest paid per year between the top paying cash ISAs and poor paying savings accounts can be as much as £156 for basic rate tax payers.


See how much better off you can be with an ISA
Gross interest earned in 12 months on £3,000Less tax at 20% Basic rateNet Interest received in your account
High Street Current Account
(0.1%)
£3.00£0.60£2.40
Halifax Liquid Gold Savings
(0.75%)
£22.50£4.50£18.00
N S & I Mini Cash ISA
(5.80%)
£174.00Nil – TAX FREE!£174.00

Things you should know about Cash ISAs

  • Individual Savings Accounts (ISAs) are tax free savings accounts
  • You can save up to £3,000 a year in a Cash ISA each tax year
  • You can save from as a little as £1 per month
  • Some allow instant access via a cash card and many others have Internet and phone access too.

Not all Cash ISAs are flexible and friendly and things to watch out for are

  • Some will offer you a great rate at first, but then drop the rate after a period of time - ING Direct has recently launched a cash ISA that guarantees to pay you 6.55% for the first six months, then a variable rate of 5.13%
  • Others may require a minimum investment before you are eligible for a good rate - National Savings & Investments offers a rate of 5.81% but only for customers that deposit a minimum of £1,000.
  • Some ISAs are portable, so you can switch providers to combine existing accounts to provide a better return on your savings. However, some charge transfer out penalties, some require 90 days notice and some will only accept new money, so it is definitely worth checking the small print. After all, a typical transfer out fee of £30 will wipe out a considerable proportion of your interest earned over the year.

And, don't forget to check out our Cash ISA best buys

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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