Assuming the amount of money that I want to put away to make interest is the same for both account and the interest rate is offered for both is pretty much the same... just say 5%
Thank you.
2007-08-14 13:04:59 · 4 answers · asked by lisamarie 1 in Business & Finance ➔ Personal Finance
In the US, it would both be considered interest and be taxed at your tax rate.
2007-08-14 14:11:23 · answer #1 · answered by shoredude2 7 · 0⤊ 0⤋
They will be taxed the same. Interest is considered income no matter which type of savings product it comes from. If the rates are very similar I would consider you need for liquidity (or the ability you have to get to your money) to choose the one you want to go with. Most CD's have hefty penalties for withdrawing early. If you think you may need the money, and the rates are close to the same-go with the savings. If you are putting the money away and dont want to use it if at all possible, do the cd.
2007-08-14 20:27:09 · answer #2 · answered by tuffgrl96 2 · 0⤊ 0⤋
The amount of money that you are taxed on income comes down to how much income you have received after all of your yearly deductions. For instance, if you made $3000 in interest, $20,000 off of the sale of a home and $40,000 at your job, you would have shown that you made $63,000 and would be taxed off of $63,000.
If you write off $11,000, then you are only taxed on $52,000...
The more money you make, the higher percentage in taxes that you pay... the average american typically pays about 25% of their gross income.
2007-08-15 15:29:00 · answer #3 · answered by The Smart One 4 · 0⤊ 0⤋
There is no difference. For tax purposes it is treated as interest income in both cases.
2007-08-14 20:11:00 · answer #4 · answered by Uncle Pennybags 7 · 0⤊ 0⤋