The 2011/12 cash Isa season starts today, 6 April 2011, with an increased limit of £5,340. And if you’ve got money in a 2010/11 or earlier cash Isa, you can switch it in whole or in part to a better deal.
The overall annual Isa limit is now £10,680, £5,340 of which can go into a cash Isa. These limits will change each year in line with the Retail Prices Index (RPI).
Transfer your old cash Isas to get a better deal
You can transfer all or part of previous years’ Isas to any other provider which accepts transfers, without affecting the current tax year’s Isa allowance. The only restriction is that if you want to switch your current year’s Isa as well, you must switch all the money you’ve paid in since 6 April. This won’t be an issue for anyone just yet as the new 2011/12 Isa season has only started today.
If you do transfer, don’t just withdraw your cash Isa money from your existing provider – otherwise you’ll lose your tax relief. You should arrange for your new and old Isa providers to carry out the transfer between them.
Previously, you could only transfer cash Isas to other cash Isas, or stocks and shares Isas to other stocks and shares Isas. However, since 2008 it has been possible to transfer money held in a cash Isa into a stocks and shares Isa – but not the other way around.
Best rate cash Isas
Which? Best Rate cash Isa tables are updated daily to show the best new deals.
If you’re looking for an instant-access cash Isa, the AA is currently paying 3.35%. This account is only available online though, so if you want an account with branch or telephone access, you should consider the 3.3% on offer with Santander’s Flexible Isa. Neither of these accounts accepts transfers in though.
If you want to avoid the big banks and don’t mind giving 33 to 90 days’ notice, Best Rate notice accounts from Manchester BS, National Counties BS, Charity Bank and Dunfermline BS all pay between 2.5% and 2.86%.
There are also currently some attractive one-year fixed-rate Isa deals paying up to 3.2%, three-year fixed-rate Isas paying up to 4.16% and five-year deals paying 5%.
- Cash Isas are a great way to cut the tax you pay. For more tax-saving tips, read our guide 30 ways to cut tax.
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