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Barclays launches competitive Golden Isa

New account pays 3.1% on instant access savings

Barclays has launched a new issue of its Golden Isa, a tax-free savings account that pays a rate of 3.1% AER on instant access savings.

The account requires an initial investment of just £1 and allows deposits up to the Isa limit for the current tax year: £3,600 for anyone under 50 and £5,100 for those people who will be aged 50 or over by 5 April 2010. From 6 April, all savers will be able to deposit up to £5,100 per tax year in a cash Isa.

Barclays’ Golden Isa Issue 2 can be operated online, by phone or in branch. The interest rate of 3.1% it offers includes a 1% bonus, payable for 12 months from the date upon which the account was originally opened.

Best rate cash Isas

Barclays’ Golden Isa competes favourably with the other cash Isas available on the market, but is beaten on rate by the Alliance & Leicester and Santander Flexible Isa. It offers a rate of 3.5% AER on deposits, and also comes with a guarantee that the interest rate payable on the account will remain 3% above the Bank of England base rate for 12 months.

However, neither Santander’s Flexible Isa nor the Barclays Golden Isa allow savers to transfer in their Isa savings from previous tax years. This means they do not meet the stringent criteria set by Which? for inclusion in our Best Rate cash Isa table.

Barclays’ Golden Isa or Santander’s Flexible Isa might be suitable for an individual just beginning to save or if you haven’t used any of this year’s cash Isa allowance yet, but neither deal is likely to be a good choice if you have an existing chunk of Isa savings and want to keep your Isas together.

If you already have tax-free cash put by, check out our cash Isas review for an account that might suit you.

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