Should you abandon your Isa?

Individual Savings Accounts have long been heralded as the best place for your savings. But low interest rates mean some experts now say that you could earn more in a standard savings account, despite the tax advantages of an Isa. So is it time to ditch your Isa? Ruth Jackson investigates.

For the past decade, Individual Savings Accounts (Isas) have been plugged as the best place for your savings. But pathetic interest rates mean some experts are now warning that your money could earn you more in a standard account, even if you take account of the tax advantages. But is that really the case?

The savings rates on cash Isas are certainly woefully low. So low that "savers in cash Isas could be missing out on sorely needed income that they could receive through another product from their provider", says Nina Montagu-Smith in The Daily Telegraph. Her argument is based on a review of fixed-rate cash Isas and fixed-rate bonds by Defaqto. And she's got a point.

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Ruth Jackson-Kirby

Ruth Jackson-Kirby is a freelance personal finance journalist with 17 years’ experience, writing about everything from savings accounts and credit cards to pensions, property and pet insurance.

Ruth started her career at MoneyWeek after graduating with an MA from the University of St Andrews, and she continues to contribute regular articles to our personal finance section. After leaving MoneyWeek she went on to become deputy editor of Moneywise before becoming a freelance journalist.

Ruth writes regularly for national publications including The Sunday Times, The Times, The Mail on Sunday and Good Housekeeping, among many other titles both online and offline.