With the deadline to put money into your tax-free cash Isa account now just 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 2.50%, which includes a 2.00% bonus payable to 31 July 2014 and requires a minimum deposit of £1,000.
The instant-access cash Isas from Harpenden Building Society and Stafford Railway Building Society are worth noting as they both 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 2.80% but this includes a bonus of 0.60% over 12 months, after which time the rate will drop to 2.20%.
If you’re looking for a more consistent rate, the Notice Isa from Earl Shilton Building Society pays 2.70% 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 2.50% 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 3.00% on initial balances of at least £500. Bank of Scotland and Virgin Money are next, both offering a rate of 2.40%.
Four-year fixed-rate cash Isa
The best four-year fixed-rate cash Isa deal at the moment is offered by Halifax and pays 3.05% 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 3.10%. Virgin Money are second with its Cash e-Isa, paying 2.75%.
Cash Isa tip of the week
If you wish to (and provided you have not paid into a fixed-rate cash Isa), you can transfer all of your Isa savings – including the money you have put into this year’s cash Isa – to a new provider, but time is running out for this tax year.