ISA rates on the rise as tax deadline approaches

Commenting on the latest cash ISA offerings from Abbey and Barclays, Kevin Mountford, head of savings at price comparison site moneysupermarket.com, said: "Savers are really being spoiled at the moment and from Monday, they’ll be able to choose from two new accounts from Barclays and Abbey, offering 6.5 and 6.25 per cent respectively.

"The race for customers is hotting up as we head towards the end of the tax year. Alliance & Leicester already has a 6.25 per cent Direct ISA, and Abbey and Barclays are the latest providers to match or better this rate. This is impressive given there is still over a month to go until the tax year ends. Normally providers keep their ISA cards close to their chest and play their ace much later, so there could be even more impressive rates offered over the next couple of weeks.

"On rate alone, Barclays is the clear leader with its 6.5 per cent Tax Haven ISA but, as ever, savers need to look at the whole package. For savers with previous sums to transfer, they will be better off with the Direct ISAs from A& L or Abbey at 6.25 per cent. The Barclays ISA doesn't allow transfers in, and many savers get caught out by these type of things if they ignore the terms and conditions.

"There are a couple of deals paying 10 per cent – Abbey’s Super ISA and A& L's Premier Direct ISA Issue 2 – but these are only accessible under certain terms. With A& L, only savers that open its Premier current account can access the ISA. Abbey's Super ISA insists savers deposit at least £1,500 in its Guaranteed Growth Plan. Again, this shows the need for savers to check what they are signing up for as things aren't always what they seem."