With the deadline to put money into your tax-free cash Isa account just two weeks away, Which? takes its weekly look at the best deals the market has to offer.
Cash Isa deadline is 5 April 2013
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 allowance for the tax year ending 5 April 2013 is £11,280. This will increase to £11,520 for the 2013/14 tax year, starting 6 April 2013, while the limit for cash Isas is will rise to £5,760 from £5,640.
The market’s best cash Isas
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 and Santander’s Direct Isa Saver, both paying 2.50% but after 15 months and 12 months respectively, the rate plunges to just 0.5%.
The instant-access cash Isa from Harpenden Building Society is worth noting as it pays 2.25% and doesn’t include a bonus, so you won’t have to worry about the rate dropping off after 12 months.
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. Coventry Building Society’s 60 Day Notice Isa pays an attractive rate of 2.80% but this includes a bonus of 0.60% over 12 months, after which time the rate will drop to 2.20%.
One-year fixed-rate cash Isa
Metro Bank’s one-year fixed-rate cash Isa is the best in the market at present. It pays 2.25% and allows transfers in from other providers. The one-year fixed-rate Isa from Skipton Building Society isn’t far behind with a rate of 2.10% but this account requires a minimum deposit of £500.
Two-year fixed-rate cash Isa
The two-year fixed-rate cash Isa deal from Santander paying 2.80% is the best product if you’re happy to tie your money up for two years.
Three-year fixed-rate cash Isa
The Isa Saver Fixed from Halifax currently tops our three-year fixed-rate cash Isa table, paying 3.00% on initial balances of at least £500. Leeds Building Society is next, offering a rate of 2.60%.
Four-year fixed-rate cash Isa
The best four-year fixed-rate cash Isa deal at the moment is offered by Halifax and pays 3.05% on deposits over £500.
Five-year fixed-rate cash Isa
The Halifax’s Isa Saver Fixed account currently tops our five-year fixed-rate cash Isa table paying 3.10%. Principality Building Society, Skipton Building Society and Virgin Money are all next with cash Isa deals paying 2.75%.
Cash Isa tip of the week
If you haven’t used your Isa allowance by 5 April 2013 don’t assume that you can roll it over into next year. You can’t carry over any unused allowance into the next tax year and will lose it if you haven’t put the money into a cash Isa by deadline day. So act now if you haven’t used this year’s allowance.