With the deadline to put money into your tax-free cash Isa account now just a month away, Which? provides our weekly look at the best deals out there.
Cash Isa deadline is 5 April 2014
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 or a stocks and shares Isa, or both. The overall limit for the tax year ending 5 April 2014 is £11,520 and this goes up to £11,880 for the new tax year of 2014/15 starting 6 April 2014. The limit for cash Isas this year is £5,760, going up to £5,940 for 2014/15.
To maximise your tax-free allowance, remember to save in a cash Isa before putting your money in an ordinary taxable savings account.
The best cash Isas
Instant access cash Isa
Top of the pile at the moment in the best instant-access cash Isa sector is Stafford Railway Building Society, with its deal paying 1.75% on deposits starting from a minimum of £250. However, this account doesn’t allow transfers in from other providers.
Nationwide’s Instant Isa Saver and Virgin Money’s Access Cash Isa are worth considering as they allow transfers in from other providers and offer a competitive rate of 1.50%. Furthermore, these accounts don’t includes a bonus, so you won’t have to worry about the rate dropping off after an initial 12-month period.
Notice cash Isa
Notice cash Isa accounts used to pay a higher rate for locking up your money, but at the moment, just one pays more than the top instant access cash Isa rate.
For example, Earl Shilton Building Society’s 90 Day Notice Cash Isa pays an attractive rate of 1.80%, but you’ll need to give 90 days’ notice to get at your cash. It’s worth noting that this Isa doesn’t allow transfers. If you’re after a deal which allows transfers, the Isa from Mansfield Building Society offers a rate of 1.75%.
One-year fixed-rate cash Isa
Britannia’s one-year fixed-rate cash Isa is the best in the market at present. It pays 1.85% and allows transfers in from other providers. The one-year fixed-rate Isa from National Counties Building Society isn’t far behind, at 1.76%.
Two-year fixed-rate cash Isa
The two-year fixed-rate cash Isa deal from Britannia, paying 2.05%, is the best product if you’re happy to tie your money up for two years.
Three-year fixed-rate cash Isa
United Trust Bank’s fixed rate Isa account currently tops our three-year fixed-rate cash Isa table, paying 2.25% from initial balances of £5,000. The Bank of Cyprus, Chelsea Building Society and Yorkshire Building Society follow closely behind, at 2.20%
Four-year fixed-rate cash Isa
The Bank of Scotland and Lloyds Bank both pay 2.15% and are the best four-year fixed-rate cash Isa deals at the moment. The Lloyds account increases its rate to 2.40% from balances of £20,000.
Five-year fixed-rate cash Isa
Skipton Building Society’s Fixed Rate Isa account currently tops our five-year fixed-rate cash Isa table, paying 3.00% from an initial deposit of £500.
Cash Isa tip of the week
If you wish to (and provided you haven’t 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.