As of 6 April cash and equity ISA allowances have increased, giving you the chance to save or invest more money tax-free. The overall annual savings limit has now increased to £7,200, of which up to £3,600 can be kept in a cash ISA.
Already, several banks and building societies launched new ISAs. But although rates look good, many expect savers to invest the full £3,600 upfront and don’t allow transfers from previous ISAs.
Fixed rate ISAs
If you have the full £3,600 to deposit straight away then there are several attractive products on offer. Top of the list is from the Principality, which has launched a six-month ISA paying 6.6% AER.
This rate stands out from the rest of the crowd and unlike many providers Principality accepts transfers from previous ISAs.
Bradford & Bingley's new one-year fixed ISA priced at 6.25% AER is also only available for people who are willing to deposit the full £3,600 in one go. However, this account doesn't accept transfers.
Coventry Building Society is also offering an ISA that pays 6% AER until 31 May 2009 on deposits of £3,600. Transfers are not permitted.
If you have £3,000 to put into a new ISA, then Halifax offers a four-year account paying 6.2% AER. This account accepts transfers from previous tax years' cash ISA savings.
Or, you could opt for Julian Hodge Bank's ISA which is fixed at 6.15% AER for one-year.
For those with less to save, Skipton Building Society has launched a fixed rate cash ISA paying 6.26% AER until 5 April 2009. The account doesn’t accept transfers but has a minimum deposit of just £50.
Meanwhile, Nationwide pays 6.15% on its two-year fixed ISA on deposits of just £1.
|Fixed rate ISAs||AER||Notice or term||Deposit||Tranfers?|
|Bradford & Bingley||6.25%||One-year||£3,600||No|
|Julian Hodge Bank||6.15%||One-year||£3,000||Yes|
|Source: Moneyfacts 14/04/08|
Remember, fixed rate ISAs offer security of rate but do not always allow easy access.
Barclays Banks continues to offer its Tax Haven ISA paying 6.5% AER on deposits from £1. The rate includes a bonus rate of 1% for 12 months and transfers are not permitted. However, the account offers instant access and withdrawals from £10.
A new ISA for the new tax year is from National Counties Building Society. Its instant ISA pays 6.26% AER on deposits from £1, accepts transfers and also offers an interest rate guarantee of at least 0.4% above the Bank of England bank rate until 5 April 2009.
Or, Dunfermline has launched a 30-day notice ISA paying 6.25% AER on deposits from £1. Transfers are not allowed.
Other attractive variable rate ISAs are now available for the new tax year. Scarborough Building Society pays 6.3% AER on deposits of £1,000 and accepts transfers but you will need to give 30-days notice to make a withdrawal.
Alliance & Leicester offers an instant account paying 6.25% AER on deposits of just £1. Transfers are accepted.
|Variable rate ISAs||AER||Notice or term||Deposit||Introductory bonus||Transfers?|
|Barclays Bank||6.5%||None||£1||1% for 12 months||No|
|National Counties BS||6.26%||None||£1||n/a||Yes|
|Alliance & Leicester||6.25%||None||£1||1% until 31/05/09||Yes|
|Source: Moneyfacts 14/04/08|