With the deadline to put money into your tax-free cash Isa account now only two weeks away, Which? Money provides its weekly look at the best deals out there.
Cash Isa deadline is 5 April 2012
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 limit for the tax year ending 5 April 2012 is £10,680 and this goes up to £11,280 for the 2012/13 tax year starting on 6 April 2012. However, the limit for cash Isas is £5,340, going up to £5,640 for 2012/13.
The market’s best cash Isas
Warning: Isa deals and rates are changing every day at the moment as we approach 5 April 2012 and some offers are disappearing at short notice. Click on the links below for the most up-to-date deals.
Instant access cash Isa
The AA’s Internet Access Isa Issue 3 is now paying 3.5% (including a bonus of 3% for the first year), the best rate for instant access cash Isas, but does not accept transfers in from other providers. Cheshire BS’s Direct Cash Isa pays 3.35%, but also doesn’t allow transfers in.
Santander’s Direct Isa Issue 9 pays 3.30%, which includes a 12-month bonus of 2.80%, and is the highest-paying Isa to allow transfers in. The minimum deposit for this account is £2,500.
Marks & Spencer Money’s Advantage Isa and Virgin Money’s Easy Access Isa/E-Isa are worth noting as they allow transfers in and the headline rates (3.0% and 2.85% respectively) don’t include a bonus, so you don’t have to worry about the rate dropping off after 12 months.
Notice cash Isa
Notice cash Isa accounts used to pay a higher rate for locking up your money, but don’t tend to anymore. The Aldermore 60 Day Cash Isa Issue 1 does pay an attractive rate of 3.15%, but you’ll need to give 60 days notice to get at your cash. After that the next best account pays 2.75%.
One-year fixed-rate cash Isa
Santander’s one-year fixed-rate cash Isa is the market leader in this sector paying 3.50% and allowing transfers in. The one-year fixed-rate Isas from Marks & Spencer Money and Metro Bank are next best with a rate of 3.25%.
Two-year fixed-rate cash Isa
BM Savings Two-year Fixed Rate Isa offers 4.20% and has a minimum deposit of £500. The two-year fixed-rate cash Isa deal from Santander (4.00%) is also an attractive product if you’re happy to tie your money up for two years. Both of these Isas allow transfers in.
Three-year fixed-rate cash Isa
The Halifax Three-year Fixed Rate Isa Saver account currently tops our three-year fixed-rate cash Isa table paying 4.25% on initial balances of at least £500. The Cheltenham & Gloucester Three-year Fixed Rate account pays 3.90%.
Four-year fixed-rate cash Isa
The Halifax Four-year Fixed Rate Isa Saver pays 4.35% and is the only four-year fixed-rate cash Isa deal that qualifies to feature in our tables at the moment.
Five-year fixed-rate cash Isa
Once again, Halifax leads the way with its five-year Fixed Rate Isa Saver with a rate of 4.50%, a minimum deposit of £500 and allowing transfers in.
BM Savings and Clydesdale/Yorkshire Bank Fixed-Rate Isa accounts are currently paying 4.30% and 4.25% respectively. These Isas all allow transfers in from other accounts.
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 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.