Are you saving money in a bank account? Well, here is something important: the taxman might just take some of that money from you as tax! It’s happening because interest rates on savings are going up, and the rules about how much money you’re allowed to save without paying tax just haven’t caught up.

From this year, more than six million savings accounts could start attracting tax by this April. That is double last year’s number!

Here is what is happening: if you earn interest on your savings above a threshold, you might be required to pay tax on it. Even though you are earning little interest from that account, you might end up paying tax because of other income which catapults you to a higher tax band.

According to the experts, there may exist some ways to protect your savings by using ISAs, which are special savings accounts wherein one does not have to pay tax; they might have slightly lower interest rates but can save one from a big tax bill.

You need to be aware of how much interest your savings are earning,” says Rachel Springall, independent finance expert. With interest rates rising, that speedier Momentum is going to hit that tax limit sooner than before.

So if you’re saving up, at any time check how much interest you earn and whether you might have to pay tax on it. All things considered, this should keep your hard-earned savings safe from the sneaky taxes!

Saves are good habits, right? Many people deposit their excess money to the banks in their savings accounts. This will keep your money safe, and probably with a small extra called “interest.”

But do you know sometimes the government might take some of that extra money you earn as tax? It’s true! This happens when your saving earns more interest than a certain amount.

The government has just estimated that over six million savings accounts could be caught by the tax. That is a lot, considering this number almost doubled within the space of a year. Why is this happening?

This means that when you earn interest on your savings, the government allows you to earn some amount without paying any tax. If your savings earn more interest than that amount, you might have to pay back part of it as tax to the government. You could end up even owing tax if your income goes up—even if you don’t earn much interest.

Now, one of the ways this tax will be avoided is through something we call an ISA. ISA stands for Individual Savings Account. It’s just a special type of savings account wherein the interest doesn’t suffer tax as it comes along. It may not be as generous in interest compared to other types of savings accounts; however, they will save people from having to pay a big tax bill.

What’s important,” says Rachel Springall, an expert in money matters, “is knowing exactly how much interest a person is earning on their savings.”