New plans to cut the length of time it takes to move your money from one ISA provider to another are set to give Britons up to £14.5 million more a year in interest. They also make it even more worthwhile for taxpayers with spare cash to invest the maximum possible allowance every year.
You can put away £5,100 in cash every year in the tax-free accounts, and another £5,100 in a stocks and shares ISA. But don’t just put your money into last year’s account - a lot of banks and building societies offer headline rates with temporary bonuses, so last year’s top-paying ISA may have a mediocre rate today.
Instead, check out the best buy tables on sites such as moneyfacts.co.uk and moneysupermarket.com. If you want instant access, the best account at the moment is Nationwide’s e-ISA, with 2.75 per cent interest. It also takes transfers from other accounts.
Birmingham Midshires and Cheltenham & Gloucester both offer interest rates of 2.7 per cent. If you want to fix for longer, the top year-long option is the Post Office’s fixed rate cash ISA (Issue 2) - at three per cent. Over five years, Nationwide pays 4.25 per cent.
It currently takes about 26 days for providers to switch ISA accounts, but under new rules by the Office of Fair Trading announced at the end of June 2010, this should fall to 15 days by the end of the year and ultimately “just a handful” of days.
It has also ruled that interest rates should be published on all ISA statements, which will help you ensure you’re getting the best return possible at all times.