Best savings account for 2k?

[PumpkinSteve]

Okay, I know it's not a great deal of money but I want to choose the best account for saving my money. I have £2000 at the moment but I'm hoping to add another £500 max per month.

I currently have an ISA account and an ESAVER account which have interest rates of 2.8% and 3.2% respectively. Both accounts are instant access, just in case something happens and I need the money quickly. Even though the ISA is tax-free, would that still give me less interest than the ESAVER?

If you'd advise something else, another type of account maybe, let me know. I'm not very good when it comes to this kind of stuff.

Thanks

[RizzoTheRat]

Money supermarket, money saving expert and financial times websites are all good for comparing accounts. Sounds like you're looking short term so cash isa makes more sense than stocks and shares isa. You can put a bit over £5k per year in so get as much as you can in before April and the limit resets.

eta: basic rate tax is 20%, so on a 3.2% account you're keeping 2.56% and the rest goes to the tax man, so the ISA is still a better deal.

Edited by RizzoTheRat on Thursday 26th January 13:45

[PumpkinSteve]

So the cash ISA, once you reach your £5k limit and it restarts next year, do you gain an additional £5k allowance or do you have to remove the money you've put in and start again?

To put it more clearly: after 2 years will I have £10k in the ISA or will I still have £5k and the rest will be transferred to a standard savings account?

[Chris Type R]

PumpkinSteve said:

So the cash ISA, once you reach your £5k limit and it restarts next year, do you gain an additional £5k allowance or do you have to remove the money you've put in and start again?

To put it more clearly: after 2 years will I have £10k in the ISA or will I still have £5k and the rest will be transferred to a standard savings account?

The former.

[RizzoTheRat]

But bear in mind if you take it out you can't put it back in, eg if you pay in 3k, then withdraw 1k, you can still only pay in a further 2k that year. The limit is on paying it in not on how much you have in there.

[PumpkinSteve]

Thank you