ISA or Bonds advice please?

[MyBrownEyedHandsomeBoy]

Never done ISA's/Bonds before...

Which is the best option for transferring a lump sum of £20k into?
I've seen a 1yr flexible cash ISA which has 5.3% AER and allows you to make 3 withdrawals if needed... is this a good deal currently?

TIA 🙏🏻

What do you want to do with the money and what is your income tax band?

Yes, that's a good deal.

1. It's an ISA, so the interest will be tax free. 5.3% on £20k is over £1,000. If it were in a bond (ie not tax free) and depending on your circumstances (eg if your income is more than £17.5k a year) you'd have to pay some tax on it.
2. You can make withdrawals if you need the money. If it were a fixed rate ISA, you'd be able to access the money but would pay a penalty (ie loss of interest based on a certain duration).

My income is over £17,500 p/y so I'm assuming the flex ISA is best option to avoid the tax on bonds then?
Thanks for the advice @Plexie 🙏🏻

If you are a basic rate tax payer you can earn up to £1k in savings interest before you would be liable to pay any tax on it.

Personally I'd put as much of the 20k as you can unto the NS&I growth bond for 12 months at 6.2% so not to exceed the £1k, noting that you CANNOT access the money within the 12 months and the interest would be paid at the end and into the 24/25 tax year.

Put the remainder of the money in the best ISA you can find, if you are happy to lock it away for 12 months then Santander to a 1 year fix at 5.05% (you could access the money in an emergency but it would mean closing the ISA and you would forfeit 120 days of interest)