🔔 Start as you mean to go on…..Where to put your 2016/17 Cash ISA allowance

The start of the 2016/17 tax year gives savers the opportunity to put £15,240 into a cash ISA.

With many providers saving their best deals for the start of the tax year and those who act early taking advantage of tax free interest for the longest possible time, it is important to take action now for the maximum benefit.

Whilst hindsight is a wonderful thing, the lack of new entrants to the best buy tables towards the end of the last tax year, suggests that leaving it to the last minute does not necessarily mean you can get the best deals and those who do so could have missed out on a whole tax year of tax free interest.

Cash ISAs do not count towards your Personal Savings Allowance and by not using your cash ISA allowance you are reducing the amount you can save overall tax free in the future, so should still be considered as part of your savings strategy.

With this all in mind, looking at the top rates available at the moment is a great place to start when deciding where to put your cash ISA allowance and there are a range of different options to choose from, depending on your individual circumstances.

For those who need easy access to their cash, the top rates on offer at the moment are from Coventry Building Society and Skipton Building Society, both paying 1.40% tax free/AER on a minimum of just £1. If you are able to give notice for withdrawals both Clydesdale Bank and Yorkshire Bank offer a 40 day notice ISA paying 1.50% tax free/AER on balances above £15,000.

For more information on these accounts, please refer to our Variable Rate ISA Best Buy Table.

if you're happy to tie your money away for a set term, Fixed Rate ISAs can offer better rates. There are various terms available ranging from one to five years, so you can choose a term that suits your individual circumstances. Aldermore currently dominates the shorter term market with market leading rates for 1 year fixed rate ISA (1.50% tax free/AER), 2 year fixed rate ISA (1.75% tax free/AER) and 3 year fixed rate ISA (1.85% tax free/AER). For those looking for a longer five year term, United Bank UK offer the top rate at 2.33% tax free/AER.

For more information and options, please take a look at our Fixed Rate ISA Best Buy Table.

Don’t forget, if you are a First Time Buyer, you can pay into a Help to Buy ISA this tax year, putting up to £1,200 in the first month and £200 per month thereafter, with the added benefit of a 25% bonus from the government on the purchase of your first property. For full information on Help to Buy ISAs, download our Factsheet. With some competitive rates on offer at the moment, these ISAs could be ideal for those looking to build up a deposit. But they’re not appropriate for those who want to use their full ISA allowance in cash, as you are restricted on the amount you can deposit, yet use the one cash ISA that you are allowed to subscribe to each year. Take a look at our Help to Buy ISA Best Buy Table for the current top deals.

You can also invest for your child in a Junior ISA this tax year. Up to £4,080 can be invested in the 2016/17 tax year, with some competitive rates featured in our Junior ISA Best Buy Table.

Saving in a cash ISA is a great habit to get into and the earlier you can do so, the more tax free interest you can earn. The good news is that from April 2017, the ISA allowance will increase by a hefty 31% to £20,000 per tax year, so starting as you mean to go really could help both now and in the future.