ISAs have always been of more interest to the savers than other savings options. This is mainly due to the tax free status attached with the ISAs; after all who would not want to pocket some extra cash. With the year April 2011, came fresh cash ISA allowance of £5,340. This provided a year-long window till April 5 2011 to save the entire ISA allowance and get the returns earned tax free.
Leaving the saving decision to the last minute may not be a wise choice. Paying-in early would mean getting better returns. Savers have the option of either topping-up the existing pot of Cash ISA or open a new ISA account.
This makes it utterly important for the savers to evaluate and compare the existing Cash ISA rates and find the best cash isa options for coming tears.Benefits offered by various financial institutions and banks differ greatly, so it is crucial to make your research before deciding on any alternatives.
Navigating through the list of all the new ISAs and finding the best cash isa for 2011-2012, is no easy task, but we have made our research and give you the best cash ISA options we have found.
Best Cash ISA options for 2011-2012
Barclays Golden Cash ISA
Barclays offers a variable rate of 3.25% and guarantees to track the government’s base rate for the first 12 months. This account requires a minimum balance of £1 only and offers an introductory 1% bonus paid for the first year. This cash ISA does not permit transfers from other accounts.
Some may debate that the rate offered by AA savings is better at 3.35%; however it does not track the base rate. Also, Santander offers 3.3% Flexible ISA but there have been some news of delays in the ISA transfers. Barclays’ rate may go up with the increase in the base rate, which is expected to hike up in December 2011. This would mean that the Golden ISA pays around 4% interest tax-free, which may equal the present inflation rate.
Halifax ISA Direct Reward
Halifax pays variable 3% interest on its ISA Direct rewards and 3.2% to current Halifax account holders. The account requires a minimum balance of £1 and allows instant access to the savings with unlimited number of withdrawals. It also allows transfer in from other accounts. However, after a year, the interest rate goes down by 0.5%, which may prompt the savers to either move their savings or get the brunt of less return.
This account, however, is ideal for transfers. It may fall behind the Nationwide e-ISA at 3.1% for the transfers, but you need to be a current or card savings account holder to take advantage of this. Thus, Halifax is a winner for transfers as if the rates go high in the coming years, being able to move cash may come as a great plus.
Northern Rocks Three Year Fixed Rate
With a rate of 4.25%, this indeed is a great deal for savers of Cash ISA for the 2011/2012 tax year. A minimum opening balance of £500 is a must; however, it allows transfers in. Withdrawals may lead to a loss of interest of 120 days.
This may look a little low if the bank of England’s base rate hikes up. But as long as it does not go any high, savers are in safe hands and they can witness their savings growing at a good fixed rate.