Which? Money provides its weekly look at the best deals out there to help you invest your new cash Isa allowance for 2013/14.
Cash Isa allowance for 2013/2014
Each year you can deposit your savings into a cash and/or stocks and shares Isa.
The overall allowance has increased to £11,520 for the 2013/14 tax year, which started on 6 April 2013. The limit for cash Isas has risen to £5,760 from £5,640.
If you’re looking to open a new cash Isa to pay your 2013/14 allowance into, or wish to transfer previous years’ money, check out the Which? Best Rate Isa tables. Fixed-rate cash Isa deals can provide attractive rates if you’re happy to tie your money up for a period of time.
Get the best cash Isas on the market
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 3 account paying 2.30%, which includes a 1.80% bonus payable to 31 October 2014. You will need to review this account once the bonus period ends and switch to a more competitive deal.
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. Unfortunately at present, there are no notice accounts which pay more than the best-rate instant access account.
The best rate available is from Which? Recommended Provider – Aldermore Bank. Its 60 Day Notice Cash Isa pays 2.10% from initial balances of £1,000.
One-year fixed-rate cash Isa
At present, there are no one-year fixed rate cash Isas on the market that can beat or even match the best instant-access account, so bear this in mind before deciding to tie up your money.
If you’d still like to lock away your money for 12 months, the best one-year deal at present is offered by Aldermore Bank paying 2.25%, followed by Manchester Building Society’s deal at 2.15%.
Two-year fixed-rate cash Isa
The two-year fixed-rate cash Isa deal from Coventry Building Society at 2.55% is best if you’re happy to tie your money up for two years. However, this account does not allow transfers in from other providers.
If you wish to transfer existing Isa balances, deals from KRBS and Skipton Building Society both offer the top rate at 2.40%. The minimum initial deposit required is £1,000 and £500 respectively.
Three-year fixed-rate cash Isa
The Fixed Isa from Skipton Building Society currently tops our three-year fixed-rate cash Isa table, paying 2.55% on initial balances of at least £500. The next best account at 2.50% is offered by Aldermore (a Which? Recommended Provider).
Four-year fixed-rate cash Isa
The best four-year fixed-rate cash Isa deal at the moment is offered by Bank of Scotland and pays 2.45% (less than the best three-year option). This account can be operated at a branch, via the internet or over the telephone.
Five-year fixed-rate cash Isa
Principality Building Society currently tops our five-year fixed-rate cash Isa table with its deal paying 3.10% from a minimum deposit of £500.
Cash Isa tip of the week
You’re only allowed to pay new money into one ‘active’ Isa per tax year, but you can hold multiple ‘inactive’ Isas from previous tax years. Don’t automatically put money into the same Isa as you had last year though, as it may not be offering a competitive deal this year. Also, it’s worth checking the rate you’re getting on previous years’ ‘inactive’ cash Isas – if the rate is disappointing, switch them to an Isa that allows transfers in.