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Cash Isa deals of the week 13 March 2014

Which? experts round up the best cash Isa deals

piggy bank still life

With the deadline to put money into your tax-free cash Isa account now under a month away, 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 or a stocks and shares Isa, or both. 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. The limit for cash Isas this year is £5,760, going up to £5,940 for 2014/15.

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 Stafford Railway Building Society, with its deal paying 1.75% on deposits starting from a minimum of £250. However, this account doesn’t allow transfers in from other providers.

Halifax’s Isa Saver Online is worth considering as it allows transfers in from other providers and offers a competitive rate of 1.55%. However, 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 periods ends as the rate reverts to just 0.25%. 

Notice cash Isa

Notice cash Isa accounts used to pay a higher rate for locking up your money, but at the moment, just one pays more than the top instant access cash Isa rate.

For example, Earl Shilton Building Society’s 90 Day Notice Cash Isa pays a rate of 1.80%, but you’ll need to give 90 days’ notice to get at your cash. It’s worth noting that this Isa doesn’t allow transfers. If you’re after a deal which allows transfers, the Isa from Mansfield Building Society offers a rate of 1.75%.

One-year fixed-rate cash Isa

National Counties Building Society’s one-year fixed-rate cash Isa is the best in the market at present. It pays 1.76% and allows transfers in from other providers. The one-year fixed-rate Isas from the Bank of Cyprus UK, Leeds Building Society and Tesco Bank aren’t far behind, at 1.75%.

Two-year fixed-rate cash Isa

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

The Halifax and United Trust Bank currently top our three-year fixed-rate cash Isa table, both paying 2.25% from initial balances of £500 and £5,000 respectively. Chelsea Building Society and Yorkshire Building Society follow closely behind, at 2.20%

Four-year fixed-rate cash Isa 

The Halifax’s Isa Saver Fixed account pays 2.40% and is the best four-year fixed-rate cash Isa deal at the moment. The Bank of Scotland and Lloyds Bank are next, at 2.15%. If you have £20,000 or more to invest, the Lloyds account increases its rate to 2.40%.

Five-year fixed-rate cash Isa 

Skipton Building Society’s Fixed Rate Isa account currently tops our five-year fixed-rate cash Isa table, paying 3.00% from an initial deposit of £500.

Cash Isa tip of the week

Lodge your application or transfer request with your new Isa provider as soon as possible and phone to check it’s been received. Providers will vary until when they’ll accept last-minute applications, so double-check to make sure you don’t miss the boat.

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