Last chance to top up your ISA
With the tax year coming to an end - Tuesday 5 April, savers are reminded that their tax free ISA allowance has been topped up.
However,
leaving it to the last minute to top up is not advisable as many of the top deals offering the end early as banks begin to reach their targets.
UK savers currently have an annual tax free savings allowance of £10,200, half of which can be put into a cash ISA and the other half (or up to the full £10,200) can be used for share dealing ISAs.
This limit is set to rise in line with inflation from the new tax year (6 April) to £10,680, which means savers will be able to put up to £5,340 into cash ISAs every year.
There are several types of cash ISAs available on the savings market, so the rate you get depends on which account you choose.
If you are willing to lock your funds away for several years you will qualify for a better rate. However, this rate will not be affected by any changes to the Bank of England base rate, so if this rate rises you may find yourself locked in an account that is paying below average.
This can also work the other way, for example, when the base rate peaked a few years ago, those that fixed their rate will have been benefiting from high rates compared to accounts open to new customers.
Halifax is currently offering an instant access ISA that sits near the top of the Which4U ISA table with a rate of 3%. Savers are permitted to make up to 4 withdrawals per year and existing cash ISAs can be transferred to the .
Nationwide is offering 3.10% on its instant access cash ISA. The Nationwide ISA comes with no withdrawal restrictions and allows previous ISAs to be transferred, but only Nationwide customers can benefit from this ISA so if you don't currently hold an account with the building society you would need to open one.
If you are keen to make the most of your tax free haven and wish to consider a share dealing ISA you can benefit from 100% tax free returns on your earnings. These accounts have the potential to provide far greater returns than their cash counterparts, however as with any stocks and shares investment comes the element of risk.
More and more financial institutions are now offering , many of which incorporate the ISA wrapper, so savers have an array of choice.
