This comparison simply includes all savings accounts.
Savings Accounts That Are Tax Free
Why we like it: Tax free ISA account. Make up to three withdrawals during the 12-month term of this account. Open with £1 or transfer in existing ISA funds. Invest up to £20,000 per tax year. Manage your account online. Interest paid at maturity. FSCS Protected. Must be UK resident and aged 16 or older. Make more than three withdrawals and the rate drops to 0.01% AER/gross p.a. (variable). Not available in branch
Why we like it: Instant ISA Saver is designed for those that want the convenience of a tax-free cash ISA with instant access. Earn 0.01% AER (variable) on balances between £1 and £9,999, 0.03% AER (variable) on balances between £10,000 and £49,999, and 0.05% (variable) AER on balanced over £50,000
Savings accounts that are tax free
When putting your money into a savings account, you need to consider how long you intend to save for and how much of a return you would like to see. You can then compare the different types of savings accounts available to see which ones best match you saving goals.
Tax-free interest on savings accounts.
From April 2016, you are entitled to a personal savings allowance.
If you are a basic rate taxpayer, you could earn up to £1,000 in interest without having to pay tax. The tax allowance for those paying a higher rate of tax is £500.
If you are looking to build up savings tax free the you should consider a ISA.
UK tax payers normally have to pay tax on any interest they earn on their savings. However, a cash ISA allows you to earn interest, tax-free, on deposits up to an agreed yearly limit. For the 2017/18 tax year that amount is £20,000.
There are two main types of cash ISAs – instant access and fixed-term. Instant access cash ISAs allow you to withdraw money whenever you need without paying a penalty, making them ideal for short term saving. Fixed-term cash ISAs have similar conditions to fixed rate bonds, so you may be unable to withdraw money until they reach the end of their term or have to pay a penalty in order to do so.
Cash ISAs allow you the flexibility to withdraw as much of your savings as you wish and replace it without it counting towards your annual ISA allowance.In order to benefit from this flexibility, you must replace the money within the same tax year.If you fail to replace the money you withdraw from your savings in the same tax year, your ISA allowance will be affected.
You can also transfer your savings from one ISA to another, if you are so inclined, without affecting your ISA allowance. Therefore, it is possible to open a cash ISA for your 2017/2018 allowance and transfer your savings from your existing ISA into it as well.It is important to note that not all providers will allow transfers from existing ISAs.
Cash ISAs do not always offer the best interest rates, so you will need to assess whether any tax savings will outweigh the benefits of the higher interest rates provides by other types of accounts.
Find the best short term savings account for you
With so many different brands and products on the market, it can be hard to figure out which offer the best deals for you. The comparison table at the top of this page is regularly updated with the most attractive deals on short term savings accounts from across the industry. This makes it easy for you to contrast the features of different accounts and find the right one for your saving needs.