Best cash ISAs for transfers

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Want to transfer your existing ISA savings but don't know which provider will accept your money? Moneywise looks at the top accounts accepting transfers.

Savers who have used their cash ISA allowance every year since their launch in 1999 could be £3,000 better off – but many ISA savers are losing out because they have fail to move their money into a new account regularly.

ISA rules only allow savers to save a certain amount of money tax-free each tax year – the current cash ISA allowance for 2009/10 is £3,600, or £5,100 if you are aged over 50. However, many cash ISA providers allow you to move money from previous ISAs into your new account.

This won’t affect your current ISA allowance – and is a good way to ensure your savings from previous tax years maintain their tax-free status but continue to earn a decent rate of interest.

When you consider that the average cash ISA currently pays just 0.47%, it makes a lot of sense to move your ISAs from previous tax years and keep your savings altogether.

Two of the top cash ISAs currently on the market - Santander's 3.5% deal and Barclays 3.1% Golden ISA - don’t accept transfers in.

So what are your other options?

The best rate is currently offered by Yorkshire Bank. It pays a fixed rate of 5% on deposits of £2,000 plus.

However there is a catch - this account is fixed for five years so you'll have to lock your money away until 2015. During that time, interest rates are expected to rise, so you could miss out.

Leeds Building Society also offers a five-year fixed cash ISA - this time paying 4.6% AER on deposits of £1 plus. Or Birmingham Midshires pays 4.55% and Principality pays 4.5% - both for five years on deposits of £500 and £3,600 respectively.

In terms of one-year fixed rates, The Post Office pays 3% AER on deposits from £500.

If a fixed rate isn't for you, then you might want to consider Newcastle Building Society's 120-day notice account. This pays 3% on deposits of £500, including a bonus rate of 1% for 12 months.

Buckingham Building Society pays 2.86% AER on its 180-day notice account, this time on deposits of £100 plus.

If giving notice isn't up your street, then consider Nationwide's 2.75% variable-rate ISA, which includes a bonus rate of 1% for a year. You can open this account from as little as £1 deposit.

Both Cheltenham & Gloucester and Birmingham Midshires both pay 2.7% AER on deposits from £1 and £500 respectively. Both these accounts include bonus rates, so remember to switch once these run out.





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