Stash cash in an ISA before it's too late

Putting money into a mini cash individual savings account (ISA) is a complete no-brainer.

If you've got money to put by, it should go straight inside one of these tax-free savings wrappers. Fail to do so and, in effect, you're donating cash to the Chancellor's coffers.

You can save up to £3,000 a year tax-free in a mini cash ISA - and rates are currently topping 5 per cent. But with the end of the tax year looming (it's less than three weeks away, on 5 April), you'll need to act fast if you're going to take advantage of this year's allowance. Any part of it remaining unused by the above date will be lost.

"Time is of the essence," says Susan Hannums from independent financial adviser Chase de Vere. "It is vital that if you have cash languishing in any account and have not made use of your ISA allowance, then you should do so immediately. What is the point of paying tax on your savings if you don't have to?"

Many ISAs now offer the benefits of easy withdrawal and penalty-free access. Abbey even offers an ISA account that comes with a cash card.

Lisa Taylor from the financial analyst Moneyfacts stresses that mini cash ISAs are not just for those people with long-term savings plans and large sums to invest. "Cash ISAs can offer instant access to funds while requiring minimum deposits as low as £1," she explains.

But before they take the plunge, it's crucial that savers understand the conditions attached to their chosen account.

"Some will charge you to transfer money into a cash account [from another account]," continues Ms Taylor. "And they often include short-term bonuses within the [advertised interest] rate."

An astonishing three quarters (23 million) of UK taxpayers will put nothing into an ISA this year, research by Portman building society shows. That means we're missing out on £3.56bn in tax-free interest.

For "pure simplicity", Ms Hannums picks out the Halifax's Saver Direct ISA, paying 5 per cent on balances of £1 or more. Alternatively, she recommends Alliance & Leicester's Direct ISA (issue 2), paying 5.2 per cent, also on balances of at least £1.

"This does include a bonus of 0.7 per cent," she points out. "But it lasts until April 2007, so you should take advantage of the rate now, and then move your money when the bonus comes to an end."

For those happy to bank online, Bradford & Bingley pays 5 per cent on its internet-only account (a minimum investment of £1,000 is required).

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Life and Style
The new Windows 10 Start Menu
tech
News
More than 90 years of car history are coming to an end with the abolition of the paper car-tax disc
newsThis and other facts you never knew about the paper circle - completely obsolete today
News
people'I’d rather have Fred and Rose West quote my characters on childcare'
Arts and Entertainment
There has been a boom in ticket sales for female comics, according to an industry survey
comedyFirst national survey reveals Britain’s comedic tastes
PROMOTED VIDEO
Arts and Entertainment
Hilary North's 'How My Life Has Changed', 2001
booksWell it was good enough for Ancient Egyptians and Picasso...
News
Kim Jong Un gives field guidance during his inspection of the Korean People's Army (KPA) Naval Unit 167
newsSouth Korean reports suggest rumours of a coup were unfounded
Travel
Bruce Chatwin's novel 'On the Black Hill' was set at The Vision Farm
travelOne of the finest one-day walks you could hope for - in Britain
Arts and Entertainment
Gay and OK: a scene from 'Pride'
filmsUS film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
News
people
Life and Style
Magic roundabouts: the gyratory system that has excited enthusiasts in Swindon
motoringJust who are the Roundabout Appreciation Society?
Arts and Entertainment
You could be in the Glastonbury crowd next summer if you follow our tips for bagging tickets this week
music
Sport
footballManchester City 1 Roma 1: Result leaves Premier League champions in danger of not progressing
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Trainee Recruitment Consultant - Birmingham - Real Staffing

    £18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

    Trust Accountant - Kent

    NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

    Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

    £18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

    Law Costs

    Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

    Day In a Page

    Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

    The children orphaned by Ebola...

    ... then rejected by surviving relatives over fear of infection
    Pride: Are censors pandering to homophobia?

    Are censors pandering to homophobia?

    US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
    The magic of roundabouts

    Lords of the rings

    Just who are the Roundabout Appreciation Society?
    Why do we like making lists?

    Notes to self: Why do we like making lists?

    Well it was good enough for Ancient Egyptians and Picasso...
    Hong Kong protests: A good time to open a new restaurant?

    A good time to open a new restaurant in Hong Kong?

    As pro-democracy demonstrators hold firm, chef Rowley Leigh, who's in the city to open a new restaurant, says you couldn't hope to meet a nicer bunch
    Paris Fashion Week: Karl Lagerfeld leads a feminist riot on 'Boulevard Chanel'

    Paris Fashion Week

    Lagerfeld leads a feminist riot on 'Boulevard Chanel'
    Bruce Chatwin's Wales: One of the finest one-day walks in Britain

    Simon Calder discovers Bruce Chatwin's Wales

    One of the finest one-day walks you could hope for - in Britain
    10 best children's nightwear

    10 best children's nightwear

    Make sure the kids stay cosy on cooler autumn nights in this selection of pjs, onesies and nighties
    Manchester City vs Roma: Five things we learnt from City’s draw at the Etihad

    Manchester City vs Roma

    Five things we learnt from City’s Champions League draw at the Etihad
    Martin Hardy: Mike Ashley must act now and end the Alan Pardew reign

    Trouble on the Tyne

    Ashley must act now and end Pardew's reign at Newcastle, says Martin Hardy
    Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

    Isis an hour away from Baghdad -

    and with no sign of Iraq army being able to make a successful counter-attack
    Turner Prize 2014 is frustratingly timid

    Turner Prize 2014 is frustratingly timid

    The exhibition nods to rich and potentially brilliant ideas, but steps back
    Last chance to see: Half the world’s animals have disappeared over the last 40 years

    Last chance to see...

    The Earth’s animal wildlife population has halved in 40 years
    So here's why teenagers are always grumpy - and it's not what you think

    Truth behind teens' grumpiness

    Early school hours mess with their biological clocks
    Why can no one stop hackers putting celebrities' private photos online?

    Hacked photos: the third wave

    Why can no one stop hackers putting celebrities' private photos online?