The Best Mini Cash ISA Tax Free Savings Account - August 2007
Personal_Finance / ISA's Aug 08, 2007 - 09:59 PM GMTBy: Shahla_Walayat
UK Interest rates were raised to 5.75% in July and over the last 6 weeks many cash ISA providers have reflected the change by raising interest rates on the cash element of individual savings accounts. The following table represents a selection of the best Cash ISA accounts currently available.
But first, a quick Summary of Cash ISA Rules
- The CASH ISA accounts are TAX FREE, and do not have to be entered onto any tax returns.
- The Allowance for 2007-08 is £3000, this is set to rise to £3,600 for 2008-09.
- You can only open ONE New cash isa per tax year, and you can add new monies to One Cash Isa per tax year (see transfers).
- You do not have to open a Cash ISA with your existing provider, i.e. you can open an account at different providers every year.
- Most providers allow for transfers in. And ALL should allow you to transfer out.
- Once you withdraw from a Cash ISA you cannot then then re-deposit into. The £3000 limit refers to total deposited, and not maximum account balance. So if you deposit £3000, and withdraw £1000, then you cannot re-deposit that £1000 in the same tax year as you have used up your £3000 deposit limit.
- To maximize your tax free interest, it is best to open your account at the start of the tax year.
The following are a selection of the Current Best Cash ISA accounts
| Financial Institution | Interest Rate | Fixed Period | Minimum £ | Comments |
| BMW | 6.67% | 1 Year | £100 | Yes this ISA is run by BMW the motor company (no transfers in) |
| Ruffler Bank | 6.40% | Instant | £15,000 | Would need to transfer a cash Isa to meet opening requirements of £15k |
| Nat Savings | 6.30% | Instant | £1,000 | Tracks the base rate +0.55% until April 2008 (No transfer ins) |
| Kent Reliance | 6.21% | Instant | £1 | Tracks the BOE base rate |
| Nationwide | 6.15% | 1 years | £1 | Longer fixes at same rate available |
| Halifax | 6.25% | 2 years | £3,000 | 1 year fix 6.20%, 3 year 6.15% - Good for transfers into. |
| Scarborough | 6.10% | 30day | £1,000 | |
| Northern Rock | 6.16% | 1 year | £500 | |
| Abbey | 6.00% | Instant | £1 | 6.25% paid on balances above £9000 |
| Derbyshire | 6.00% | 2 years | £1,000 | Have not announced a change in rates since May! But still a respectable 2 year fix. |
Best of the above:
Instant Access
The two instant access trackers by Kent Reliance and National Savings stand out, especially as expectations are for further interest rate rises later this year.
Fixed Rates
The BMW 1 year fix is paying an extraordinarily high 6.67% rate. The Halifax 2 year fix also looks good at 6.25% with the added bonus of allowing transfers in
By Shahla Walayat
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