The loss of confidence in the financial sector due to the US subprime mortgage sparked credit crunch had resulted higher money market interest rates over the last few months. Though as warned in several previous articles, these high rates are slowly in the process of being withdrawn from the market in advance of cuts in UK interest rates. Though opportunities do still exist to lock in relatively high rates before the first cut in UK interest rates. The following table represents a selection of the best Cash ISA accounts currently available.

Selection of the Current Best Cash ISA accounts (Nov 07)

Financial Institution	Interest Rate	Fixed Period	Minimum £	Comments
Ruffler Bank	6.40%	Instant	£9,000	Would need to transfer a cash Isa to meet opening requirements of £9k(down from 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%, 2 year 6.25%, 4year 6.5%- Good for transfers into.
Northern Rock	6.20%	1 year	£500	The Government has provided a guarantee to savers
Abbey	6.00%	Instant	£1	6.25% paid on balances above £9000
Derbyshire	6.30%	2 years	£1,000	Are usually slow in improving on rates in response to market changes.

Best of the above:

Instant Access

The two instant access trackers by Kent Reliance and National Savings continue to stand out. For those with at least £9k its worth taking a look at Ruffler bank for a transfer in.

Fixed Rates

The best fixed rates have now been withdrawn. Currently the best 2 year fixes are with Halifax at 6.25% and the Derbyshire at 6.30% , with the added bonus of allowing transfers in. There also exists a 4 year fix with the Halifax at 6.50%

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.

By Shahla Walayat
http://www.moneyforums.co.uk

Moneyforums is a FREE site which provides UK Money Saving Guides, Tools and Forums including - Credit Score Calculator and the Savings Calculator . Mortgage and Tax Calculators. Money Saving Guides such as Credit Card Stoozing , Savings Tree , Money Saving Guide. Personal Finance Discussion Forums open to ALL, supported by experienced moderators, to discuss any personal finance topics from The best Savings & Deposit Accounts , Regular Savers and Cash ISA's and more.

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