Come April, the sides of buses and every road-side hoarding scream about ISAs, reminding savers about the deadline to use up the tax-free allowance.
But, if you’ve got spare savings now, don’t wait for the end of the tax year to take advantage of the opportunity to squirrel away up to £5,340 in cash, and another £5,340 in shares, tax-free. There may not be as many reminders about, but ISA deals come and go all the time. Start housekeeping on your savings now to benefit.
The current top payers are Santander, offering 3.3 per cent with its Flexible ISA Issue 3; the AA, offering 3.05 per cent with its Internet Access Issue Two, and Halifax, paying 3 per cent with its ISA Direct Reward.
For savers willing to lock away cash for longer, Northern Rock Fixed Rate e-ISA Issue 18 pays 4.01 per cent, while Chelsea Building Society’s Fixed Rate e-ISA pays 3.70 per cent. Make sure you keep tabs on your rate. Most best-buys include a year-long bonus: after that, the interest rate plunges, often to less than one per cent.
Meanwhile, if you have kids and want to put away a nest egg for their future, now is the time to start thinking about it. The Government’s much-discussed Junior ISA scheme - which replaced the old child trust fund (CTF) initiative - will finally launch in November. The maximum investment has just been lifted from £3000 to £3,600 a year.
Unlike CTFs, the government will not top up kids’ ISA accounts. But still, according to the pointy heads at JP Morgan Asset Management, parents investing the maximum £3,600 a year from birth could provide their kids with a tax-free gift of more than £100,000 at the age of 18. Banks will be unveiling their Junior ISA offerings over the next few months, so compare the market to secure the product with the highest-paying interest rate.