The deadline for investing in an ISA and making the most of the tax-free allowance for this tax year is fast approaching, and ISA providers are falling over themselves to attract customers.
"This year the battle for a slice of the tax-free savings market has kicked off earlier than usual, with two of the current top three best buys (Scarborough BS and Icesave) having been launched in the last month." said Michelle Slade, analyst at Moneyfacts.co.uk.
Moneyfacts.co.uk is urging savers to take advantage of their ISA allowances
by April 5th or see it lost forever as the tax year rolls over, and suggests moving existing ISAs into a more competitive account to enhance their returns.
They recommend that savers shop around to find the best places to invest their cash because the market will become increasingly competitive in the run up to 'new tax year's eve' but only for a limited time.
Ms Slade commented: "If previous years are anything to go by we will see a glut of new ISA deals being launched in the next few weeks, but be warned; many of them will only be around for a couple of months before being pulled from the shelves.
"It’s refreshing to see that the best buys this year aren’t dominated by accounts with bonuses. Large bonuses for limited periods mean that the once great rates you originally plumped for, suddenly don’t look so appealing 12 months later."
This year marks some important changes to ISAs for the consumer. From April 2008, the amount allowed to be invested each year has risen from £7,000 in total to £7,200; the maximum cash allowance has risen to £3,600 from £3,000, and the additional allowance can also be invested in equities.
The new rules also mean that previous years' savings can now be transferred from cash to stocks and shares, but not the other way around, so stocks and shares investments have to remain as such.
Moneyfacts.co.uk also urges savers to check out the savings accounts available when they have used up their tax-free savings allowance, because "Due to the extremely competitive nature of the savings market at the moment, there are some excellent deals to be had."
© Fair Investment Company Ltd