The taxman says three and a half million people are due a refund, but two million will have to fork out for underpaid tax.
The best Cash ISAs
As Santander pulls its market-leading ISA, we take a look at the best Cash ISAs on the market today and how they compare to the heights of ISA season.
The best Cash ISAs
Savers still have eight months left to take advantage of their tax free savings allowance on cash (currently £5,640) for 2012/2013. Sadly, many of the best Cash ISAs launched at the beginning of the year, in April, have been withdrawn. Indeed just last week Santander pulled its Cash ISA paying 3,3%, which was a market leader.
So if you have some money that needs a good home, which are the best new homes for your cash? Below I've put together a round-up of the best Cash ISAs paying more than 3% - so beating inflation - across a range of terms.
Best notice and instant access Cash ISAs
ISA | Interest rate AER | Minimum deposit | Transfers in? | Term/Notice |
Coventry BS 60 Day Notice ISA | 3.25% (includes a 0.50% bonus for 12 months) | £1 | No | 60 days notice |
West Brom BS WebBSave ISA 6 | 3.18% (includes 1.66% bonus to 30.09.13) | £1,000 | Yes | 60 days notice |
Aldermore 60 Day Notice Cash ISA Issue 1 | 3.15% (includes a bonus of 1.65% until 01.03.13) | £1,000 | Yes | 60 days notice |
Manchester BS Platinum Instant ISA Issue 1 | 3.06% (includes a bonus of 1.05% for 12 months) | £1,000 | Yes | Instant access |
Barclays Cash ISA Loyalty Reward ISA* | 3.05% (includes a bonus of 1.0% for 12 months) | £1 | No | Instant access |
Post Office Premier Cash ISA | 3.01% (includes a bonus of 1.26% for 18 months) | £100 | Yes | Instant access |
ING Direct Cash ISA | 3.00% (rate guaranteed for 12 months) | £1 | No | Instant access |
Marks & Spencer Advantage Cash ISA | 3.00% | £100 | Yes | Instant access |
Santander Direct ISA Issue 10 | 3.00% (includes a bonus of 2.50% for 12 months) | £500 | Yes | Instant access |
*Only available to existing customers
Best one-year fixed rate Cash ISAs
ISA | Interest rate AER | Minimum deposit | Transfers in? | Term/Notice |
Julian Hodge Bank Fixed Rate Cash ISA | 3.35% | £100 | Yes | One-year bond |
Aldermore Fixed Rate Cash ISA | 3.30% | £1,000 | Yes | One-year bond |
Metro Bank One-Year Fixed Rate Cash ISA (2) | 3.25% | £1 | Yes | One-year bond |
Santander One-Year Fixed Rate ISA | 3.20% | £500 | Yes | Fixed until 01.09.13 |
Progressive BS Ltd Issue Postal One-Year Fixed Rate ISA Bond 2 | 3.15% | £500 | Yes | One-year bond |
Marks & Spencer Cash ISA | 3.10% | £500 | Yes | One-year bond |
Kent Reliance BS Flexible Fixed Rate ISA One -Year Issue 5 | 3.10% | £1,000 | Yes | One-year bond |
Post Office Fixed Rate Cash ISA Issue 7 | 3.10% | £500 | Yes | One-year bond |
Saga* One-Year Fixed Rate ISA | 3.00% | £1 | Yes | One-year bond |
3.00% | £1 | Yes | One-year bond |
* Only available to over 50s
Best 18-month and two-year Cash ISAs
ISA | Interest rate AER | Minimum deposit | Transfers in? | Term/Notice |
Santander Two-Year Fixed Rate Major ISA | 4.00% (up to 4.1% if Rory McIlroy wins a Major) | £1 | Yes | Two-year bond |
Post Office Two-Year Fixed Rate Cash ISA | 3.60% | £500 | Yes | Two-year bond |
| Principality Building Society (18 month fixed rate) | 3.33% | £500 | Yes | 18-month fixed bond |
BM Savings Two-Year Fixed Rate ISA (yearly interest) | 3.30% | £500 | Yes | Two-year bond |
Marks & Spencer Cash ISA | 3.25% | £500 | Yes | Two-year bond |
3.25% | £500 | Yes | Two-year bond | |
Nottingham BS Fixed Rate ISA Issue 8 | 3.20% | £500 | Yes | Fixed until 31.10.2014 |
Best three-year Cash ISAs
ISA | Interest rate AER | Minimum deposit | Transfers in? | Term/Notice |
Post Office Fixed Rate Cash ISA | 3.70% | £500 | Yes | Three-year bond |
Saga Fixed Rate ISA* | 3.70% | £1 | Yes | Three-year bond |
Marks & Spencer Fixed Rate Cash ISA | 3.50% | £500 | Yes | Three-year bond |
3.50% | £500 | Yes | Three-year bond | |
3.30% | £1 | Yes | Fixed until 24.08.15 |
* Only available to over 50s
Best four- and five-year Cash ISAs
ISA | Interest rate AER | Minimum deposit | Transfers in? | Term/Notice |
4.15% | £500 | Yes | Five-year bond | |
4.10% | £500 | Yes | Four-year bond | |
BM Savings Five-Year Fixed Rate ISA (yearly interest) | 4.05% | £500 | Yes | Five-year bond |
Plummeting rates
Compared to four months ago, when the new tax year began and providers launched brand new ISAs, the rates on offer today are paltry.
Rates tend to hit their peak during ISA season as we get towards the end of the tax year. That's when providers are at their most competitive, as the new tax year sees a new ISA allowance. But rates fall, sometimes substantially, as the year goes on.
As well as rates being reduced, there are also fewer ISAs available. You can see how the table leaders have changed using our round-up from April 2012 in The best Cash ISAs for the new tax year 2012/13.
For example, the best rate instant access savings in April was 4.25% for Nationwide customers or an AA account that paid 3.5%. The best rate I could find on offer today pays just 3.06% from Machester BS.
This just goes to show how important it is to take advantage of ISAs as soon as you can. Later in the year fewer competitive accounts are likely to be around.
It's not too late though. Starting an ISA now instead of waiting for the deadline in April 2013 means you will at least have a healthier pot in time for next year. Plus, saving as early as possible in the tax year means you have more chance of taking advantage of the full allowance as well.
More on savings:
Treasury orders banks to offer simple savings accounts
Top instant access savings accounts for small deposits
Islamic Bank of Britain launches savings bond paying 4%
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