Now that the new tax year is here, it’s time to grab yourself a new ISA: unfortunately, there aren’t really that many great deals. Here’s my pick of the best of the bunch:
You can only open one cash ISA each year, so make sure you make the right choice!
Instant Access for new money – Poppy ISA from Coventry BS:
2.6% until 5 April 2014, including 0.6% bonus. 0.1% donated to the Poppy Appeal
This is the best rate I can see at the moment: the only caveat is that it doesn’t accept old money from existing ISAs.
You can still transfer your existing funds (if the initial bonus rate has expired) to another top paying ISA.
Instant Access accepting transfers in – Online Bonus ISA from Leeds BS:
2.55% until 30 April 2014, including 1.3% bonus
This account accepts transfers in. If you put the full amount in the ISA, this would be equivalent to £28.80 less interest each year (and a £57.60 donation to the Poppy Appeal) over the Coventry BS one. Whether this is worth you opening two accounts is up to you.
Two Year Fixed Rate accepting transfers in – Major ISA from Santander:
2.8% (3% for Santander 123 Current Account/Credit Card holders) for 2 years.
Additionally, you’ll receive a one-off bonus of 0.1% if Rory McIlroy wins an eligible golf ‘Major’. I’m guessing they’re a sponsor of his. I’ve had a quick look at the odds at the bookies, and it does seem likely that he’ll win at least one of them.
If you take your money out early, you’ll lose 120 days interest.
Why put money in ISAs when you could have them in a 3% current account?
Whilst you can get 3% on your current account, this is taxed at 20%, leaving you with 2.4%, even less if you’re a higher rate tax payer. Additionally, these funds will remain tax free for as long as you don’t withdraw them: so you could be saving up to a handy tax-free nest egg.
Cash ISAs vs Stocks and Shares ISAs
You can invest up to £5,760 in a Cash ISA and another £5,760 in a Stocks and Shares ISA. Alternatively you can invest all of it (£11,520) in a Stocks and Shares ISA.
Got some better ISAs? Feel free to recommend them in the comments!