Best Mini Cash ISA Tax Free Savings Accounts for 2008
Personal_Finance / ISA's Jan 06, 2008 - 05:57 AM GMTBy: Shahla_Walayat
Concerted central banks action is attempting to cut money market interest rates, this has met with some success with the LIBOR rate falling from a peak of 6.8% to the current 5.75% This is resulting in a cut in savings interest rates, however the likelihood is that there will be further deep cuts in UK interest rates during 2008, therefore the warnings that I have been issuing over the last 5 months to lock your in Cash ISA rates now at high levels still stands, though the fixed rates approaching 7% are long gone.
Selection of the Current Best Cash ISA accounts (Jan 08)
| Financial Institution | Interest Rate | Fixed Period | Minimum £ | Comments |
| Ruffler Bank | 6.14% | 30 day | £9,000 | Would need to transfer a cash Isa to meet opening requirements of £9k(down from 15k) |
| Nat Savings | 6.05% | Instant | £1,000 | Tracks the base rate +0.55% until April 2008 (No transfer ins) |
| Kent Reliance | 6.05% | 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 6.10%, 3 year 6.20%, 4year 6.5%- Good for transfers into. |
| Northern Rock | 6.20% | 1 year | £500 | The Government has provided a 100% guarantee to savers |
| Cheshire BS | 6.25% | 1 year | £1000 | 12 month fix (11th issue) |
| Bradford & Bingley | 6.20% | 1 year | £1,000 | 1 year term |
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 for 30day access.
Fixed Rates
Currently the best 2 year fixes are with Halifax at 6.25% and the Cheshire at 6.25% , with the added bonus of allowing transfers in. There also exists a 4 year fix with the Halifax at whopping 6.50% a rate that compares well with the high rates of 6.75%+ available just over a month ago.
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
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