Keep your eyes on the Isa fine print
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Just because an Isa – or any investment product – offers the top rate doesn’t necessarily mean it’s the best account for you. For example, is there a chance you’ll need quick access to cash in the future?
The good news is that Birmingham Midshires is offering 6.35% on its Direct Isa (Issue 1), and while it requires a minimum transfer of £1,000 there is no notice period to withdraw your money or other restrictions.
If you don’t want to part with £1,000 initially, Abbey’s Direct Isa (Issue 2) will get you 6.25% interest on as little as £1, with no restrictions. Egg’s Cash Isa will give you 6.05% interest for the same deal.
The Scarborough Building Society has an Isa with a good rate – 6.3% – but you need to front up with £1,000 to start with, and give them 30 days notice to take your money out.
Earn more interest
Likewise, Saffron and Loughborough Building Societies also offer good rates – 6.25% with Saffron, 6.10% with Loughborough – but you have to give each of them 60 days notice to access your money.
Rates with a date
You should also ensure the rate on offer will last. The Tax Haven Isa offered by Barclays Bank has an AER of 6.5%, but this includes a bonus rate of 1% that only lasts for 12 months.
Alliance & Leicester’s Direct Isa Issue 4 offers 6.25% interest, but this has a bonus rate of 1% that finishes on 1 June 2009.
Will you remember to switch your Isa as summer begins next year to continue getting a top rate? Or would you like to simply top up the same account for several years?
The potential restrictions on transferring Isa savings into a new account should also come into consideration here.
