Which? Money provides its weekly look at the best deals out there to help you invest your new cash Isa allowance for 2014/15.
Cash Isa allowance for 2014/15
Each year you can deposit your savings into a cash or a stocks and shares Isa, or both.
The overall allowance has increased to £11,880 for the 2014/15 tax year, which started on 6 April 2014. The limit for cash Isas has risen to £5,940 from £5,760.
However, from 1 July 2014, the overall investment limit will be increased further to £15,000 a year. This limit can be made up of cash, or stocks and shares, or a mixture of both.
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 Halifax, with its Isa Saver Online account, paying 1.55% on deposits starting from a minimum of just £1. However, it’s worth noting that this account includes a 1.30% bonus payable for the first year, so you’ll need to switch to a competitive account once the bonus period ends as the rate reverts to just 0.25%.
If you prefer an account which doesn’t come with a ‘teaser’ rate, Isas from GE Capital Direct, NS&I and Nationwide are worth considering as they all offer a rate of 1.50%.
Notice cash Isa
Notice cash Isa accounts used to pay a higher rate for locking up your money, but at the moment, this isn’t the case as there aren’t any notice accounts paying more than the top instant access cash Isa rate.
Bank of Cyprus UK, Charity Bank and Dudley Building Society all offer the top rate, at 1.50%, but you’ll need to give a month’s notice to get at your cash.
One-year fixed-rate cash Isa
Halifax, Julian Hodge Bank and Tesco Bank offer market-leading one-year fixed-rate cash Isas at present. They all pay 1.65% and allow transfers in from other providers. If you’re looking to save for a little longer than a year, Halifax offers an 18-month fixed rate Isa, paying 2.00%.
Two-year fixed-rate cash Isa
The two-year fixed-rate cash Isa deals from the Halifax and Nationwide, paying 2.05%, are the best products if you’re happy to tie your money up for two years.
Three-year fixed-rate cash Isa
Halifax, Nationwide and United Trust Bank currently top our three-year fixed-rate cash Isa table, all paying 2.25%. The deal from Bank of Cyprus UK follows closely behind, both at 2.10%.
Four-year fixed-rate cash Isa
Halifax’s Isa Saver Fixed and Nationwide’s Fixed Isa are both offering a rate of 2.40% and are the best four-year fixed-rate cash Isa deals at the moment. The minimum opening balance for these accounts is £500 and £1 respectively.
Five-year fixed-rate cash Isa
Principality Building Society, Skipton Building Society and United Trust Bank currently top our five-year fixed-rate cash Isa table, at 2.75%. The accounts from Principality Building Society and Skipton Building Society require an initial deposit of £500.
Cash Isa tip of the week
If you want to move money from one Isa to another, your old and new Isa providers should arrange the transfer of your funds between them, protecting your tax-free benefits. You’ll need to complete an Isa transfer form, which will include a note to be sent to your existing Isa provider.
The key point is that you shouldn’t just take out the cash from your Isa account to deposit elsewhere – you’ll lose your tax benefits by doing this.