Best Cash ISA Tax Free Savings Accounts for the New Tax Year
Personal_Finance / ISA's Apr 23, 2009 - 06:28 AM GMTBy: MoneyFacts
Cash ISAs are many savers’ first port of call when it comes to creating a nest egg, but in a turbulent year just who has reigned supreme, offering the best rate of return to savers?
This year’s cash ISA survey from Moneyfacts.co.uk shows the projected values over the 2008/09 tax year. Assuming that the full investment of £3,600 was made on 6 April 2008, no withdrawals were made and all interest was compounded during the tax year, the survey has yielded some very interesting results.
Michelle Slade, analyst at Moneyfacts.co.uk commented:
“Alliance and Leicester took the top spot with its Premier ISA (£3,927.37), but in order to qualify for the account you had to be new or existing Premier current account customer and invest at least £5,000 in another A&L investment product.
“Unsurprisingly it was fixed rate cash ISAs that yielded some of the top returns. Savers who locked the rate on their money last year achieved an interest rate of 6.25% from Bradford & Bingley and would have weathered the storm of interest rate cuts that followed as the crunch began to bite.
Top fixed rate ISAs
| Provider | Account | Rate | Notice/Term | Value |
| Bradford & Bingley | One Year Fixed Rate ISA | 6.25% | 1 Year | £3,825.00 |
| Julian Hodge Bank | One Year Fixed ISA | 6.15% | 1 Year | £3,824.68 |
| Halifax | Fixed Rate ISA Saver | 6.20% | 4 Years | £3,823.20 |
| Northern Rock | One Year Fixed Rate ISA | 6.10% | 15.04.09 | £3,822.23 |
| Northern Rock | Three Year Fixed Rate ISA | 6.10% | 15.04.11 | £3,822.23 |
| Source: Moneyfacts 23.4.09 | ||||
“National Counties BS (£3,785.06) took the top spot for variable rate ISAs, closely followed by Loughborough BS (£3,784.83). Considering how far base rate fell in the year, these are impressive results.
Top variable rate ISAs
| Provider | Account | Rate Today | Notice/Term | Value |
| National Counties BS | Cash ISA Issue 2 | 1.81% | Instant | £3,785.06 |
| Loughborough BS | 90 Day Cash ISA | 2.70%* | 90 Day | £3,784.83 |
| Barclays Bank | Tax Haven ISA | 2.08%* | Instant | £3,783.22 |
| Egg | Egg Cash ISA | 1.55%* | None | £3,776.09 |
| Kent Reliance BS | Direct Variable Rate Cash ISA | 1.42% | None | £3,770.91 |
| * No longer open to new customers – rate taken from providers website Source: Moneyfacts 23.4.09 |
||||
“The ISA Saver (£3,678.05) from Halifax and Cash ISA (£3,683.39) from Alliance & Leicester were the worst performing ISAs of last year, showing that savers really should shop around and not just approach their current account provider.
“Despite a string of rate cuts in the last six months, cash ISAs still provide the best value for money, with the average rate today standing at 1.94% compared to just 0.65% on a no notice account. The forthcoming increase in ISA allowance to £5,100 will be a much welcomed boost for disillusioned savers.
“Many over 50s rely on the interest from their savings as their main source of income. While the Treasury is supporting them, they still have to wait until 6 October to benefit from the increase in allowance.
“Manchester BS currently tops the Moneyfacts.co.uk best buys, paying 3.56%. The only benefit to savers is from non payment of tax on any interest earned. Over 50’s would receive an extra £5.34 this tax year should they top up with the additional £1,500 in October, when compared to investing the same amount at the same rate in a standard savings account.
“Anyone not in the top paying account will receive much less benefit, with those in an average paying account getting just £2.91 in additional interest.”
For the full table of results visit http://www.moneyfacts.co.uk/surveys/default.aspx
www.moneyfacts.co.uk - The Money Search EngineMoneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.
© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.
