Countdown on ISAs

by Gill Montia

Story link: Countdown on ISAs

Savers are being reminded to take advantage of an Individual Savings Account (ISA) before the tax year ends on the 5th April.

The ISA rules are changing in the new tax year but there is still time to invest up to £7,000 in a maxi stocks and shares ISA; £3,000 in a cash mini ISA and £4,000 in a stocks and shares mini ISA.

Net sales of ISAs have declined in recent months, as a result of the turmoil on the money markets but Rachel Thrussell of financial website, Moneyfacts, believes that this is a good time to invest.

She explains: “The last few weeks have seen the banks and building societies upping their game as the new tax year approaches. Last year’s best buys were dominated by rates up to a maximum of 6.05%. However, in what has become a far more competitive environment this year, all the best buy rates are paying 6.10% and above.”

Consumers should be aware that many of the most attractive ISA rates come with conditions attached.

For example, Abbey’s Super ISA Issue 2 pays 10% but savers need to invest an equal amount in the bank’s Guaranteed Growth Plan, and the rate on offer reverts to the Direct ISA Issue 2 rate after 13 months.

Alliance & Leicester is also offering 10% on its Premier ISA Issue 2 but only for Premier current account holders, who will need to pay least £500 a month into the current account and open an investment product with at least £5,000 in addition.