Cash Isa deals of the week 29 May 2014Which? experts round up the best cash Isa deals

29 May 2014

Piggy bank

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 was initially 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 are GE Capital Direct, Nationwide, NS&I and Skipton Building Society, all paying 1.50%. However, it's worth noting that the accounts from NS&I and Skipton Building Society don't allow transfers in from other providers.

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

Julian Hodge Bank, Krbs 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. The deal from Aldermore Bank follows closely behind, at 1.60%.

Two-year fixed-rate cash Isa

The two-year fixed-rate cash Isa deal from Nationwide, 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 

Nationwide and United Trust Bank currently top our three-year fixed-rate cash Isa table, both paying 2.25%. The fixed rate Isa from Virgin Money isn't far behind, at 2.15%.

Four-year fixed-rate cash Isa 

Nationwide's Fixed Isa is offering a rate of 2.40% and is the best four-year fixed-rate cash Isa deal at the moment. The minimum opening balance for this account is just £1.

Five-year fixed-rate cash Isa 

Julian Hodge Bank currently tops our five-year fixed-rate cash Isa table, at 3.00%. This postal account requires a minimum initial deposit of £5,640.

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.

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