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Cash Isa deals of the week 6 February 2014

Which? experts round up the best cash Isa deals

Green piggy bank representing cash Isa

With the deadline to put money into your tax-free cash Isa account fast approaching, 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 and/or stocks and shares Isa. 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. However, the limit for cash Isas is £5,760, going up to £5,940 for 2014/15. 

The market’s best cash Isas

Instant access cash Isa 

Top of the pile at the moment in the best instant-access cash Isa sector are National Savings & Investments and Stafford Railway Building Society, both offering deals paying 1.75%. However, these accounts don’t allow transfers in from other providers.

Darlington Building Society’s Cash Isa and Krbs Easy Access Cash Isa Issue 6 are worth noting as they allow transfers in from other providers and offer a headline rate of 1.70%. Both accounts don’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 don’t rely on this always being the case as some accounts don’t pay more than an instant access Isa. Krbs’s 60 Day Notice Isa Issue 6 pays an attractive rate of 1.80%, but you’ll need to give 60 days notice to get at your cash.

One-year fixed-rate cash Isa

Britannia’s one-year fixed-rate cash Isa is the best in the market at present paying 1.85% and allows transfers in from other providers. The one-year fixed-rate Flexible Isa from Krbs isn’t far behind with a rate of 1.80%.

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 2.50% on initial balances of at least £5,000. Virgin Money is next paying 2.40%.

Four-year fixed-rate cash Isa 

The Halifax and Julian Hodge Bank both pay 2.00% and are the best four-year fixed-rate cash Isa deals at the moment.

Five-year fixed-rate cash Isa 

The Leeds Building Society’s Fixed Rate Isa account currently leads our five-year fixed-rate cash Isa table, paying 3.05%. This account is closely followed by Skipton Building Society and Virgin Money, both paying 3.00%.

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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