Lloyds and Santander reveal tax year end cash Isa rates
Lloyds and Santander have revealed their cash Isas in the run up to the end of the tax year.
Lloyds Cash Isa Saver pays 1.25% tax-free on balances of £1 or more to new savers, rising to 1.5% on £20,000 more. The rates include a bonus for the first 12 months after which the rate drops to 0.5%. Santander is paying 2.3% fixed for two years.
The top easy-access Isa deal comes from Britannia at 1.75% but you are limited to two withdrawals a year. Both National Counties Building Society and Metro Bank pay 1.65% while you can earn 1.6% with Nationwide on this year's cash Isa allowance.
The top fixed-rate cash Isa accounts come from Britannia at 1.85% for one year, or 2.05% for two years. Leeds Building Society, along with Santander, pays 2% for two years. At Coventry you will earn 2.75% fixed until 30 May 2017.
On taxable accounts, the best internet-based easy access account comes from National Counties Building Society at 1.36% before tax (1.08% after tax). On branch-based accounts you can earn 1.5% (1.2%) with Britannia although you are limited to four withdrawals a year.
The top easy access rate with no withdrawal restrictions comes from Virgin Money, Leeds Building Society and Newcastle Building Society all at 1.25% (1%).
On taxable fixed-rate deals, internet-based Firstsave pays 1.9% (1.52%) for one year, 2.35% (1.88%) for two years and 2.6% (2.08%) for three years.
This article was written for our sister website Money Observer
There are limits to how much you can invest in any tax year. For 2011/12, the limit is £10,680. Of that, the maximum you can invest in cash is £5,340 and the balance of £5,340 can be invested in shares (individual company shares or investment funds). If you don’t take the cash ISA allowance, you can invest up to £10,680 into a stocks and shares ISA.
Invidivual Savings Accounts were introduced on 6 April 1999 to replace personal equity plans (PEPs) and tax-exempt special savings accounts (TESSAs) with one plan that covered both stockmarket and savings products, the returns from which are tax-exempt. The ISA is not in itself an investment product. Rather, it’s a tax-free “wrapper” in which you place investments and savings up to a specified annual allowance where the returns (capital growth, dividends, interest) are tax-exempt (you don’t have to declare ISAs and their contents on your tax return). However, any dividends are taxed within the investment, and that can’t be reclaimed.
This is a mutual organisation owned by its members and not by shareholders. These societies offer a range of financial services but have historically concentrated on taking deposits from savers and lending the money to borrowers as mortgages, hence the name. In the mid-1990s many societies “demutualised” and became banks. One academic study (Heffernan, 2003) found demutualised societies’ pricing on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. In 1900, there were 2,286 building societies in the UK; in 2011, there are just 51.