Cash ISA Verses Standard Savings Account
Cash ISA Verses Standard Savings Account
When it comes to choosing a savings account, an ISA can give you multiple benefits over a regular savings account. You can even increase the benefits by finding the best cash ISA available. While an ISA and a savings account can both earn money, you can earn much more from a good ISA.
Unlike an ordinary savings account, the interest that you earn on an ISA is not taxable. You’re required by law to pay tax on any interest installments that you earn from an ordinary savings account. For most people, at least 20 percent of your interest is taxes. And, if you are a tax payer that falls into the higher rate, you could be paying as much as 40 percent in taxes.
All of the interest that an ISA earns is paid directly to you and is completely tax free. You don’t even have to declare an ISA account on your income tax return. But, you are required to declare every standard savings account that you have when you complete your tax return.
Even when a standard savings account offers a higher rate of interest, you can generally earn more from a tax free ISA with a lower rate of interest because it’s tax free. If your concerned about earning more on your savings and paying less at tax time, an ISA should be the very first place you choose to save.

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