The more people I speak to, the more I realise not everyone understands the differences between having a Savings account and a Stocks and Shares ISA.
- The key difference between an ISA and a savings account is the tax you pay on your returns. When you earn interest on your savings it is liable for income tax. If you earn more interest than that, it will be taxed.
- In contrast, ISAs are completely tax-free regardless of how much interest you earn.
- The value of an ISA can also be passed on your spouse, or civil partner, tax-efficiently if you pass away. This isn't the case with an ordinary savings account.
Still think Savings account are a good idea?
