Why are HSBC ISA interest rates higher than savings accounts?

Author	Message
Written on: 14.01.2010 [22:18]
Smith Smith Topic creator Posts: 3	Why are HSBC ISA interest rates higher than savings accounts? I don’t understand the real difference between an ISA and a savings account. I mean if I had £5,000, why would I get more from the ISA than from the savings account? Are there risks involved?
Written on: 16.01.2010 [20:32]
Matilda Matilda Posts: 3	No there are no risks involved in cash ISAs, however because there are limitations on the amount you can put in and the amount of ISAs you can hold you get a better rate. It is a tax free incentive and it is what most people should start off with. But if you did have money to invest then it wouldn’t automatically mean that an ISA is right for you. There are many factors that come in to consideration. I would say that if you are not a tax payer, and only intend on saving for short term, then an ISA would not be the best way for you to go. Savings are complicated things, you need to think things over carefully before you jump in to it.
Also very interesting: Which ISAs & savings accounts are crisis-resistant? Can I have more than one of the tax free savings account TD introduced? Is there such a thing as joint tax free savings at CIBC? Overpaying the tax free savings RBC account: any charges? Looking for a fixed rate cash isa, best rates at Barclays? Fixed rate Cash ISA (Lloyds) minimum deposit? Can I withdraw from a fixed rate cash isa? Rates not what they used to be… Help with the fixed rate Halifax ISA saver… Can I open a fixed rate Halifax web saver abroad? Who offers the current fixed rate ISA best buy?
Written on: 18.01.2010 [08:08]
Smith Smith Topic creator Posts: 3	It was just a hypothetical question, but thanks for the detailed answer I understand more now.