When to choose a fixed-rate ISA
Usually, you’d choose an ISA over other kinds of savings accounts if you want to reduce the tax you pay on your savings. You have to be earning quite a bit of interest for this to be worthwhile – your first £1,000 of savings interest is tax free anyway. That makes a real difference. In fact, in the year after that £1,000 tax-free allowance was brought in, Brits put £20bn less into cash ISAs than in the previous 12 months.
Fixed-rate ISAs are suitable for putting aside money you know you won’t need during the term. For example, if there’s money you’ve saved up for a wedding, you might want to put it away until it’s time to pay the bills.