Jumat, 11 Mei 2012

This is Money's 5 favourite best buy Isas

This is Money's 5 favourite best buy Isas

By Lee Boyce
UPDATED: 10:46 EST, 11 May 2012

Our savings correspondent, Lee Boyce, picks his five favourite cash Isas for savers in 2012. With the new tax year starting on April 6, this is essential reading to help you choose a top savings account for your money. This page is kept up-to-date - bookmark it for the very latest developments.

Welcome to our favourite cash Isas for savers! We've scoured the market and rounded up the best deals to make life that little bit easier for you as we enter the 2012-13 tax year.

Pool ball number 5

The background: Each year in April, savers are given a fresh Isa allowance that qualifies for tax-free interest.

For 2012-13, the limit has been set at £5,640 for cash Isas.

You can deposit anything up to this amount into a cash Isa from 6 April.

However, the rules state that you can only contribute to one Isa per tax year, so choosing wisely is important.

You can also transfer an old Isa for better returns. Here's a quick guide to Isa saving.

Banks know thousands of pounds are up for grabs as savers hunt out a new deal for the fresh cash Isa allowance each April. They try to lure us in with tempting rates.

To help navigate a quagmire of launches, we run an annual round-up of our five favourite Isas for the year.

How this guide works: Due to overwhelming popularity, we've decided to make a five favourite Isas round-up a permanent feature of This is Money.

So here it is, complete with an explanation detailing why we're happy to pick each account.

This page will be kept updated as and when new deals pop up or old ones get scrapped.

Remember, you can open an Isa or transfer (provided you're not tied to a fixed-term) at any time during the year.

Note that we don't just copy the best rates from the savings tables - we scour the market for all-around winners. This is a taster of the top deals. For the best rates, visit our savings rates tables, which are comprehensive and independently compiled.

Essential Isa reading:

- The Isa Centre (hub for all Isa news, tips and tricks)

- Best Isa rates tables (updated daily with best buys)

- Compare Isas in-depth (view account details in full)

- What next for savings rates? (the outlook for savers)

Our favourite five

Santander Direct Isa 9 â€" 3.3% [Full details]

- Facts: Fourth-placed instant access Isa in the savings tables behind the AA (min £2,500 and no transfers) with 3.5 per cent [more details], Cheshire BS on 3.5 per cent [more details] and NatWest (min £30k) 3.32 per cent [more details]. High minimum balance of £2,500, but transfers in are allowed. Any number of withdrawals permitted, penalty-free. Bonus of 2.8 per cent expires in 12 months time.

santander

- This is Money says: Just pips rivals Cheshire BS and NatWest Savings into our favourites list. Unlike Cheshire and AA (which is further down the list), it allows transfers in - which for seasoned Isa savers with pots elsewhere is key, and it can be managed online and via the telephone, which is crucial for instant access accounts. Put it this way - the AA only gives you £10 more interest above Santander's 3.3 per cent over a year on a £5,640 deposit.

NatWest offers a better rate for transfers - 3.32 per cent - but you need a huge £30,000 minimum balance to get it. That, and a nasty delayed start date, rules it out for most savers and keeps it off this list.

There is a large bonus to watch out for with this Santander account, worth 2.8 percentage points. Santander didn't make our hot-list last last year because we still had concerns over its customer service. In 2010, all hell broke loose and the This is Money inbox was swamped with tales of delay woe. Last year went relatively hitch-free. So we welcome back Santander with this best buy, albeit with a slight air of caution.

Halifax Online Isa - 3% [Full details]

- Facts: Tiny £1 minimum starting balance. Allows transfers in. Earn interest from the moment Halifax receives your transfer application. Open to Halifax and non-Halifax customers. Filip of £100,000 up for grabs monthly in Halifax Savers Prize Draw. Rate includes 2.75 per cent bonus for 12 months. Unlimited penalty-free withdrawals.

Halifax

- This is Money says: This is a good option for savers just starting out with Isas or transferring small pots because unlike a number of other instant access accounts, you only need £1 to get started. Cheshire BS requires £1,000, for example, on its 3.5 per cent deal and you can only access it via the postal service. Halifax offers other bonuses. Like Nationwide, Halifax offers a savings promise â€" you earn interest from the day it gets your transfer application, which gives peace of mind if the move takes more than 15 days allotted by the Office of Fair Trade. If you manage to put more than £5,000 in the account (or across Halifax savings accounts) you also qualify for the Savers Prize Draw, which hands out £100,000 to three people every month (ten people in May and June).

Santander one-year - 3.5% [Full details] / two-year - 4% [Full details]

- Facts: Two attractive fixed rates that allow transfers in. The two-year rate is just behind BM Savings' 4.05 per cent [more details]. It's called 'Major Isa' because it pays an extra 0.1 per cent if Rory McIlroy, the Northern Irish golfer wins a major during the term [more details]. The bonus is paid at maturity.

santander

- This is Money says: Anyone with an existing pot and 100 per cent sure they won't need their Isa cash for the next 12 months can lock up in a one-year deal for a little extra interest. Don't forget NatWest's 3.5 per cent instant access deal if you've got £30k to spare [more details].

Those who can say the same about the next 24 months can get an excellent 4 per cent. When you think the best five-year deal pays just 4.5 per cent - Halifax's five-year deal [more details] - this really is a top offer and makes a substantial difference over time. On £10,000, for example, the 4 per cent gets you an extra £150 over the two years compared to the 3.3 per cent instant access (see our savings calculator). It pips BM Savings' 4.05 per cent deal because of the Rory McIlroy gimmick. There is a real chance the world number one will bag a major again this year (he won the US Open in 2011) and give you an extra 0.1 points.

Halifax three-year fix â€" 4.25% [Full details]

- Facts: Top three-year deal. Transfers in allowed. Interest paid from day one of transfer application. Opportunity to enter Halifax Savers Prize Draw and win £100,000 each month.

Halifax

- This is Money says: Locking up for a three years might be quite a smart move. Interest rates are unlikely to rise much in the meanwhile, if at all. Getting an extra 0.25 percentage points (on top of Santander's two-year deal) might pay off over the three-year stretch. Again, with Halifax interest is paid on the day you transfer your Isa and you get the chance to enter the Savers Prize Draw and win £100,000 every month, at least until October. A winner in our eyes.

Cheshire BS Direct Cash Isa Issue 2 - 3.5% [Full details]

- Facts: A top paying rate of 3.5 per cent for an internet instant access cash Isa. You need a minimum of £1,000 to open the account and it has a 2.06 percentage point fixed bonus until 31 October 2013. It is a postal account.

- This is Money says: This Cheshire instant access account comes into the top five by default, after the AA pulled its 3.5 per cent rate and NatWest lowered its to 3.32 per cent. The major drawback to this account is the fact it is postal. And you also need to stay vigilant in 16 months’ time when the bonus drops off. It also doesn’t allow transfer in and is the reason why the Santander Direct Isa 9 (see above) is higher in the list is the ability to do so â€" this account offers a higher interes t to those that don’t need to transfer and are willing to go postal. Its worth noting that Cheshire is part of Nationwide.

Here's what other readers have said. Why not add your thoughts, or debate this issue live on our message boards.

The comments below have not been moderated.

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I am no expert but I moved my ING Direct ISA and added this years allowance to M S - well I think I have ! Also invested a few £1000 into (and it is against my principles !!!!) TESCO Bank one year - good rate.

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I rang up AA to buy this year isa as you recommended. I am a member. But after 20 minutes waiting with a looped recorded message gave up. Shall try the Santander one see if I have better luck there!

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see that the Halifax " 3 Year Fixed ISA" details have still not been updated. It is now a 5 year deal and doesn't allow any additional deposits. - Mike, Southport, Merseyside, 20/4/2012 You got that wrong mate the 5 year deal offers 4.5% the 3 year deal is still 4.25% check the website !

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According to their website Cheshire BS Direct ISA does not allow transfers in

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Cheshire BS Direct ISA does not allow transfers in!

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Natwest does not offer 3.5% on cash ISAs. I received a letter from them the other day saying that they were going to pull deal on balances over £30,000 from 14/05/2012 and reduce it to 3.01%

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I see that the Halifax " 3 Year Fixed ISA" details have still not been updated. It is now a 5 year deal and doesn't allow any additional deposits.

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Ian IT go to moneysavingexpert, it's there but you have to have your main bank account with them and a flex account. it's also available only after you've been with them for at least 3 months. Lots of hoops but for 4.25% worth jumping through

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With regard to the the Halifax fixed rate, although it is a great fixed rate, once you have made your initial deposit, no further deposits are permitted for the life of the fix, there is no mention in your article about this which would mean next year starting a new ISA, or have i read it wrong ? so for example, you deposit, £10,000 from a previous ISA to open the account, then the £5640 for this year’s allowance, then you your balance remains at £15640 for the remainder of the term apart from the interest accrued.

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- Ian, Glasgow, 09/4/2012 10:00 True, think i've spotted it but you must have one of their bank accounts which i think is a fee operated one too.

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