Saving money is a big task. From making sure you have a good interest rate and are happy with your bank to whether the account is right for you, it can be overwhelming for many.
With the current cost of living crisis making saving money even harder for thousands of Brits, many have been looking into the different ways to save.
Some choose to use a traditional savings account while others opt for an Individual Savings Account (ISA), but the big question is, what's better?
While some prefer the idea of not having to pay tax on savings with an ISA, others prefer the security of a savings account.
Now, helping answer the question of what's better, some financial experts have had their say and giving their answers to help you decide what's better for you.
What's better an ISA or a savings account?
Discussing the two types of accounts, Adam Thrower, Head of Savings at Shawbrook said: "With the Personal Savings Allowance (PSA) sitting unchanged at £1,000 since being introduced in 2016, savers on average estimated you could save almost three times the actual limit at £2,649 before paying any tax.
"The reality is that as interest rates have continued to rise, there are over 5 million savers who were at risk of exceeding their Personal Savings Allowance (PSA) in December 2023, a rise of 3 million from the previous year."
He added: "For those that are at risk of exceeding the PSA, ISAs are a great way of reducing your tax burden - although they sometimes come with a slightly lower interest rate.
"With many providers offering ISAs, not only can you save up to £20,000 tax-free per tax year, but you can also choose from a wide range of account types while benefiting from the tax protection the account offers."
Also shedding light on the question was co-founder of savings platform Raisin UK, Kevin Mountford who said: "Ultimately, it depends on what you want to get out of your money.
"If your priority is to protect yourself from paying tax on any interest income, then an ISA may be your best choice, however, if you like to frequently dip in and out of your savings, a general savings account will better suit your needs."
What is the difference between an ISA and a savings account?
With both ISAs and savings accounts helping people save money, it can be difficult to really know the difference.
But, co-founder of savings platform Raisin UK, Kevin Mountford has offered some advice: "The main difference between an ISA and a savings account is that an ISA is effectively a tax-efficient equivalent to a standard savings account.
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"ISAs have a limit on how much you can save each tax year, but as long as you are within that amount, you won’t have to pay tax on any interest earned.
"If, like many savers, you like to withdraw and deposit money frequently into your accounts, you may want to look towards an easy-access savings account, as you won’t be penalised for this and it won’t impact your ‘ISA allowance’ - some ISAs will take a fee if you withdraw your savings early (for example, the Lifetime ISA).
"ISAs are also usually for savers wishing to put away a large amount of money, to a maximum of £20,000."
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