ISAs - the early bird catches some great rates
The new tax year brings consumers a chance to benefit from another year's tax free ISA allowance and anyone looking to utilise their allowance from day one can maximise the returns on offer. Investing the maximum £5,340 in the current market leading cash ISA rate of 3.30 per cent would earn £176.22 in interest this year. Analysis from moneysupermarket.com reveals there are some great options available for those who want to put their money away early.
Traditionally the best ISA offers are available up until the end of the tax year, but for 2011/12, we have seen some new deals emerging and several providers have maintained their market leading rates beyond the 5th April. Savers could be better off taking out one of these products now to start accruing interest at the start of the tax year rather than waiting for a better deal later in the year.
Santander, for example, has kept its Flexible ISA Issue 3 available, offering a market leading 3.3 per cent AER, which could be a good bet for anyone looking for an early bird deal. There have also been some new products entering the market, with Halifax releasing a table topping two year Fixed Rate ISA Saver offering a very competitive 3.65 per cent AER. Leeds Building Society has today launched a market leading three-year fixed rate ISA which allows subscribers to withdraw 25 per cent of funds at anytime without notice or penalty, while BM Savings has launched a market leading five year fixed rate ISA paying 5.00 per cent.
Kevin Mountford, head of banking at moneysupermarket.com said: "A lot of savers tend to make a decision about their ISA towards the end of the financial year and as a result providers traditionally launch high profile promotional campaigns in the weeks leading up to 5th April. However, this year we have seen several providers keeping their good deals available beyond the ISA deadline and have even seen some new market leading deals being introduced from the likes of Halifax, Leeds Building Society and BM Savings.
"Making the most of their money is more important than ever for consumers. Those who take time out and take advantage of some great rates at the start of the tax year can really benefit. Savvy savers looking to generate some good returns on their hard earned cash should take advantage of these great rates whilst they're still around, as many could disappear quickly. In addition, if you have old ISA funds sitting on a low rate of interest it is worth transferring to a new deal, however be aware that some offers don't allow this. With little movement expected in the market, by shopping around and comparing the range of products that best suits their circumstances, savers could be better off taking advantage of the good rates now as they will benefit from accruing interest immediately rather than waiting for a better deal at a higher rate."