Cash Isa deals of the week 28 February 2013Which? experts round up the best cash Isa deals

28 February 2013

With the deadline to put money into your tax-free cash Isa account now just over a month away, Which? takes its weekly look at the best deals the market has to offer.

Cash Isa deadline is 5 April 2013

The cash Isa deadline is important as it signifies the end of the tax year. You'll lose this year's tax-free savings allowance if you haven't put money into an Isa before that date.

Each year you can deposit your savings into a cash and/or stocks and shares Isa. The overall allowance for the tax year ending 5 April 2013 is £11,280. This will increase to £11,520 for the 2013/14 tax year, starting 6 April 2013, while the limit for cash Isas is will rise to £5,760 from £5,640.

The market's best cash Isas

Instant-access cash Isa

Top of the pile at the moment in the instant-access cash Isa sector is Cheshire Building Society's Isa Saver Issue 1 account paying 2.5%, which includes a 2% bonus payable to 31 July 2014 and requires a minimum deposit of £1,000.

The instant-access cash Isas from Harpenden Building Society, GE Capital Direct and Stafford Railway Building Society are worth noting as they all pay 2.25% and don't include a bonus, so you won't have to worry about the rate dropping off after 12 months.

Notice cash Isa

Notice cash Isa accounts tend to pay a higher rate for locking up your money but be aware that some accounts don't pay more than an instant-access Isa. Coventry Building Society's 60 Day Notice Isa pays an attractive rate of 2.8% but this includes a bonus of 2% over 12 months, after which time the rate will drop to 0.8%.

If you're looking for a more consistent rate, the Notice Isa from Earl Shilton Building Society pays 2.7% without a bonus but this account requires 90 days notice before you can withdraw your money.

One-year fixed-rate cash Isa

Metro Bank's one-year fixed-rate cash Isa is the best in the market at present. It pays 2.25% and allows transfers in from other providers. The one-year fixed-rate Isa from Halifax isn't far behind with a rate of 2.05% but this account requires a minimum deposit of £500.

Two-year fixed-rate cash Isa

The two-year fixed-rate cash Isa deal from Halifax paying 2.5% is the best product if you're happy to tie your money up for two years.

Three-year fixed-rate cash Isa

The Isa Saver Fixed from Halifax currently tops our three-year fixed-rate cash Isa table, paying 2.6% on initial balances of at least £500. Bank of Scotland and Lloyds TSB follow closely behind with a rate of 2.4% but the Isa from Lloyds TSB requires a minimum deposit of £3,000.

Four-year fixed-rate cash Isa

The best four-year fixed-rate cash Isa deal at the moment is offered by Halifax and pays 2.65% on deposits over £500.

Five-year fixed-rate cash Isa

The Halifax's Isa Saver Fixed account currently tops our five-year fixed-rate cash Isa table paying 2.7%. This account is closely followed by the Skipton Building Society Isa, which pays 2.5%.

Cash Isa tip of the week

If you're prepared to take more of a risk, you might wish to consider investing in a stocks and shares Isa. You can invest up to £11,280 tax-free in the current tax year, rising to £11,520 from 6 April 2013.

Since 2008, it has been possible to transfer money from a cash Isa to a stocks and shares Isa. However, once you've opened the stocks and shares Isa you won't then be able to revert to cash again.

More on this...

Cookies at Which? We use cookies to help improve our sites. If you continue, we'll assume that you're happy to accept our cookies. Find out more about cookies