Are ISAs the best way to earn interest on your savings?
You may be considering an ISA to maximise the interest you earn from your savings, as ISA interest is tax free.
However, using an ISA to save money is no longer the only way to earn interest tax-free.
Through the personal savings allowance, you can earn a specified amount of money each tax year before your earnings are taxed, including your savings interest.
You will only pay tax on savings interest if the amount of interest you earn exceeds your starting rate for savings and your personal savings allowance, and your total income exceeds your personal allowance.
For most savers, the interest you earn will therefore not be taxed. You could save your money in whatever account offered you the best deal without having to worry about paying tax on your earnings.
However, if you're likely to exceed these allowances, then an ISA can still be a great way of maximising the money you earn in interest.
You can find out more about paying tax on your savings interest here.