Get top cash Isa rates before time runs out
Savers have until Saturday (5 April) to use their £5,760 cash Isa allowance for this tax year. Top easy-access deals include Nationwide Easy Isa at 1.6% and Metro Bank at 1.65%.
Santander also pays 1.6% - but only for the first year you are in the account. Nationwide pays a higher 1.75% on its Flexclusive Isa, open to some of its current account holders.
On fixed-rate deals you can earn 2% with Halifax for 18 months or 2.05% for two years. Santander and Nationwide also pay 2.05% for two years.
On taxable easy-access accounts the best rate comes from AA and Tesco Bank internet-based accounts, at 1.3% before tax (1.04% after tax); but both accounts include a bonus which is only payable for the first year you are in them.
Yorkshire, Leeds and Newcastle building societies all pay 1.25% (1%) with no bonus boosting the initial rates.
You can earn slightly more if you are willing to limit the number of times you take money out of the account each year. Britannia, part of Co-op Bank, pays 1.5% (1.2%) but limits you to four withdrawals a year.
The top one-year fixed rate comes from Britannia at 1.71% (1.37%), followed by Metro Bank at 1.75% (1.36%). For two years you can earn 2.1% (1.68%) with Shawbrook Bank and State Bank of India, or 2.05% (1.64%) with Britannia.
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.
An account opened with a clearing bank (few building societies offer current accounts) that provides the ability to draw cash (usually via a debit card) or cheques from the account. Some pay fairly minimal rates of interest if the account is in credit. Most current accounts insist your monthly income (salary or pension) is paid directly in each month and they offer a number of optional services – such as overdrafts and charge cards – which are negotiable but will incur fees.