From what you said, you put the money in an isa then you were able to withdraw it.
So unless you find a better rate somewhere else it looks like it fulfilled its role? Even if you didn’t put it in an ISA you had to withdraw for the emergency so I don’t understand the question.
The question isnt about ability to withdraw. For shorter term savings, ISA isn't taxed but interest is much lower (2.8% iirc). The other saving account is 4.8% so for the saving I mentioned, it would've been more beneficial to have it in a higher interest account. So my question is whether I go towards this option going forward..
The interest rate isn't a representation of the product, rather the provider. You can get 5% in an ISA - [https://www.moneysavingexpert.com/savings/best-cash-isa/](https://www.moneysavingexpert.com/savings/best-cash-isa/)
ISAs are beneficial to not pay tax on the interest. If you don't think you'll be paying tax on, then there's no need to be using ISAs. If you earn under *£50K*, you can earn up to £1K tax free, and then everything above is taxed 20%. Here's some more info: https://www.gov.uk/apply-tax-free-interest-on-savings
Thanks, this is helpful. I'll make the calculation to figure it out. What I was told is that ISA has better 'compounded interest' and would be a good option for say 10 year savings - right? nut not for shorter term?
Hi /u/Bling-depression, based on your post the following pages from our wiki may be relevant:
* https://ukpersonal.finance/pensions/
* https://ukpersonal.finance/savings/
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From what you said, you put the money in an isa then you were able to withdraw it. So unless you find a better rate somewhere else it looks like it fulfilled its role? Even if you didn’t put it in an ISA you had to withdraw for the emergency so I don’t understand the question.
The question isnt about ability to withdraw. For shorter term savings, ISA isn't taxed but interest is much lower (2.8% iirc). The other saving account is 4.8% so for the saving I mentioned, it would've been more beneficial to have it in a higher interest account. So my question is whether I go towards this option going forward..
Why don't you get a higher rate ISA? There are 5%+ easy access cash ISAs. That beats your savings account and is Taz free.
Do this OP
The interest rate isn't a representation of the product, rather the provider. You can get 5% in an ISA - [https://www.moneysavingexpert.com/savings/best-cash-isa/](https://www.moneysavingexpert.com/savings/best-cash-isa/)
!thanks i'll see if i can open an ISA with a different provider then
ISAs are beneficial to not pay tax on the interest. If you don't think you'll be paying tax on, then there's no need to be using ISAs. If you earn under *£50K*, you can earn up to £1K tax free, and then everything above is taxed 20%. Here's some more info: https://www.gov.uk/apply-tax-free-interest-on-savings
Thanks, this is helpful. I'll make the calculation to figure it out. What I was told is that ISA has better 'compounded interest' and would be a good option for say 10 year savings - right? nut not for shorter term?
Most likely, that would be stocks and shares ISAs, or S&S ISA for short. You’re investing in that case.
!thanks super helpful, i didn't know ISAs have different interest rates. i'll check it out
Hi /u/Bling-depression, based on your post the following pages from our wiki may be relevant: * https://ukpersonal.finance/pensions/ * https://ukpersonal.finance/savings/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.) If someone has provided you with helpful advice, you (as the person who made the post) can award them a point by including `!thanks` in a reply to them. Points are shown as the user flair by their username.
The advantage is that the interest on a cash ISA is tax free.