Two weeks ago I mentioned that Abbey and Alliance & Leicester had launched new Cash ISA products with headline grabbing interest rates, but with strings attached. To obtain the high savings rate of 8.1%, customers had to open additional accounts or take other products.
I am pleased to report this week that one of the banking giants, Barclays, has thrown down the gauntlet with its tax-beater mini cash ISA, paying 6.5% AER - without any strings attached!
The Barclays tax-beater cash ISA is top of the moneyfacts.co.uk mini Cash ISA best buy savings table. The 6.5% rate does include a 1% bonus, but it is available for a full 12 months, and with a low minimum opening balance of £1, it's definitely worth a look.
But you had better be quick - the top paying cash ISAs at the beginning of the new tax year aren't always around for long. The best mini cash ISA for last tax year was Alliance & Leicester's Direct ISA, paying 5.20%; however it was withdrawn barely a week into the new tax year!
Make sure you join one third of all UK adults, who are all using ISAs to shield their savings from Gordon Brown, even when the 2007 budget may be his last!
Whilst on the topic of Gordon Brown's budgets, it's almost two years since he introduced the Child Trust Fund. So if you know someone expecting a baby, remind them that this childrens savings account is tax-free and a great way of giving a child a nice little nest egg on their 18th birthday. Child trust funds can also be rolled over into an ISA when they mature, so there's even more reason to take advantage of them.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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