The early bird catches higher ISA returns Go compare with our comparison table

The early bird catches higher ISA returns

06 April 2010 / by Rachel Mason

From today the ISA allowance goes up from £7,200 to £10,200; make the most of it and invest sooner rather than later, says Fair Investment Company

-51% plan to make lump sum ISA investment at start of season
-Invest £10,200 now and you could earn up to £714 this year
-Invest £5,100 now and earn £204 this year

A recent Fair Investment survey revealed that more than half of investors (51%) make a lump sum ISA investment at the start of the season, with 37% already pledging to use their full £10,200 allowance this year, and Fair Investment Company is urging other investors to follow their example.

"Our survey reveals that more than half of our investors make a lump sum ISA investment at the beginning of the season, which is the most efficient way to use your ISA allowance," explains Rebecca Sargent, savings and investments at Fair Investment Company.

"By making a lump sum investment at the start of the year you have the entire tax year in which to earn a return on that cash. For example, if you were to invest your full £10,200 allowance today into a market leading stocks and shares ISA like the Schroders Income Maximiser ISA (a fund that aims to deliver a target income yield of 7% a year) by the end of the year you could get a potential return of £714*, and any tax on this is waived using an ISA wrapper."

The survey also revealed that 32% of people invest just their cash allowance, (which is now £5,100 for everyone) with 14% per cent planning to invest just their cash allowance again in the 2010/11 tax year.

"For those who are only happy investing in a cash ISA, it is also beneficial to invest the allowance at the start of the season in order to gain maximum advantage," says Rebecca.

For example, if a saver were to invest the full £5,100 into a market leading fixed rate cash ISA like the RBS Royal Deposit (fixed at 4% for 3 years) in the first year, they would earn £204 in interest.

And for those who want instant access to their cash – investing the full cash allowance into something like the Natwest E-cash ISA (currently paying 2.50%) would still earn £127.50 in a year.

"If you can, it is worth investing your full ISA allowance, or as much as you can, now, because the longer you leave it, the less you'll earn," says Rebecca.

"Take advantage of the new limits and use them to their full potential."
 

 Product NameISA OptionIncome YieldMore Info
', eventAction: 'Account', eventLabel: 'Schroders Monthly High Income' });">Schroders Monthly High Income Fundyes
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', eventAction: 'Apply Now', eventLabel: 'Schroders Monthly High Income' });">More Info >
The Schroder Monthly High Income Fund aims to generate a high income, whilst not compromising capital, by investing in a diversified basket of fixed income securities. 100% Discount off Initial Charges.
', eventAction: 'Account', eventLabel: 'Invesco Perpetual Monthly Income Plus' });">Invesco Perpetual Monthly Income Plus Fund ISAyes
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', eventAction: 'Apply Now', eventLabel: 'Invesco Perpetual Monthly Income Plus' });">More Info >
Popular monthly income fund that aims to achieve a high level of income whilst seeking to maximise total return through investing in high yielding corporate and Government bonds, together with UK equities. 100% discount on initial charges.
', eventAction: 'Account', eventLabel: 'Henderson Strategic Bond Fund' });">Henderson Strategic Bond Fundyes
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', eventAction: 'Apply Now', eventLabel: 'Henderson Strategic Bond Fund' });">More Info >
The aim of this fund is to deliver a quarterly income to investors by investing in higher yielding assets, which will include most types of fixed interest securities such as high yield bonds, investment grade bonds and government gilts, as well as having the ability to invest a proportion of the fund in equities. Income is paid to you quarterly.
', eventAction: 'Account', eventLabel: 'Schroders Income Maximiser' });">Schroders Income Maximiseryes
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', eventAction: 'Apply Now', eventLabel: 'Schroders Income Maximiser' });">More Info >
The Schroder Income Maximiser Fund ISA aims to deliver a target income yield of 7% pa, also providing potential capital growth. Income is paid to you quarterly. 100% Discount off Initial Charges.
', eventAction: 'Account', eventLabel: 'Invesco Perpetual Corporate Bond' });">Invesco Perpetual Corporate Bond ISAyes
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', eventAction: 'Apply Now', eventLabel: 'Invesco Perpetual Corporate Bond' });">More Info >
This highly popular fund aims to achieve a high level of overall return with relative security to capital. Income Paid to you twice yearly. Up to 100% Discount off the Standard Initial Fund Charge.
', eventAction: 'Account', eventLabel: 'Artemis Income ISA' });">Artemis Income ISAyes
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', eventAction: 'Apply Now', eventLabel: 'Artemis Income ISA' });">More Info >
One of the leading UK Equity Income Funds. The Fund managers hunt out companies with strong free cash flow and solid balance sheets. Income is paid to you twice yearly. 100% Discount off the Standard Initial Fund Charge.
', eventAction: 'Account', eventLabel: 'Jupiter Corporate Bond' });">Jupiter Corporate Bond Fund ISAyes
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', eventAction: 'Apply Now', eventLabel: 'Jupiter Corporate Bond' });">More Info >
The Jupiter Corporate Bond aims to achieve a high level of income with the opportunity for capital growth, through mainly investing in fixed interest securities. Income is paid to you twice yearly. 87.5% Discount off the Standard Initial Fund Charge.
', eventAction: 'Account', eventLabel: 'invesco perpetual high income' });">Invesco Perpetual High Income Fund ISAyes
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', eventAction: 'Apply Now', eventLabel: 'invesco perpetual high income' });">More Info >
One of the UK's most popular income fund ISAs the Invesco Perpetual High Income has delivered consistently good long term returns through a variety of market conditions. Income is paid to you twice yearly. Up to a 100% Discount off the Standard Initial Fund Charge.
', eventAction: 'Account', eventLabel: 'MandG Corporate Bond' });">M&G Corporate Bond ISAyes
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', eventAction: 'Apply Now', eventLabel: 'MandG Corporate Bond' });">More Info >
The M&G Corporate Bond Fund is a conservative ‘blue chip’ sterling fund that aims to produce a higher return than UK government bonds. Income is Paid to you Quarterly. 100% Discount off the Standard Initial Fund Charge.
', eventAction: 'Account', eventLabel: 'Jupiter Merlin Income' });">Jupiter Merlin Income Portfolioyes
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', eventAction: 'Apply Now', eventLabel: 'Jupiter Merlin Income' });">More Info >
The Jupiter Merlin Income Portfolio fund aims to achieve a high and rising income with some potential for capital growth. Income Distributions are made to you quarterly. 95% Discount off the Standard Initial Fund Charge.
* See details.
†† Income payments are dependent upon the FTSE 100 Index.

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