In his Budget speech earlier this year the Chancellor, Alistair Darling announced that the annual ISA limit would increase from £7,200 to £10,200. While younger savers will have to wait until the 2010/11 tax year to benefit from the increased limit, those who are currently 50 years and over, or those who turn 50 before 5th April 2010 will be able to take advantage of the increased limit from Tuesday.
Eligible savers will be able to invest £1,500 of the increased allowance in a cash ISA, with many analysts predicting a mini ISA season as providers look to attract the additional funds from savers. In the last month we have seen numerous providers jostling for position to offer savers increased ISA rates, particularly on fixed rate ISAs, and it is highly likely this will continue over the next few weeks.
Those savers who have already invested this year's allowance in a variable rate cash ISA should have no problems making the additional top-up, with only Egg not accepting the increased allowance. However, those who have taken out an existing fixed rate ISA this tax year should check with their provider as while most are allowing the additional money to be invested, not all are. Those wishing to take advantage of the increased allowance should act fast as some providers are only allowing the top ups for a limited period.
HSBC tempts ISA savers
HSBC has just launched its Fixed Rate Cash ISA paying 3.00pc. Existing HSBC customers with a Plus or Premier bank account will be eligible for the Preferential Fixed Rate Cash ISA, which pays 3.25pc. The ISA has a one year term and savers can invest between £3,600 and £43,200, as transfers in are permitted. Eligible savers who have not yet invested in a cash ISA this year will be able to invest the increased allowance from 6 October. Access to funds is available on closure only during the term and will be subject to a penalty of £100.
Head online for top rates
Following on from the success of the previous issue, Leeds Building Society has re-launched its Online Easy Access account paying 3.05pc, including a 1.00pc bonus until 30 September 2010. Savers can invest between £100 and £1m into the online operated account. No notice is required to access funds, although all withdrawals must be made via a nominated account.
Earn cash back on ISA transfers
Savers investing their annual ISA allowance in an equity ISA are being offered up to £300 cash back by Fidelity International if they transfer their money to Fidelity funds in a Fidelity ISA. The offer is available between 6 October and 30 November 2009, to investors investing over £5,000. Investors can also make an additional saving of up to £350 as no initial charge is payable for those investing online.
C&G launches new ISA
Cheltenham & Gloucester has just launched its new Two Year Fixed Rate ISA paying 3.75pc. Savers can invest between £100 and £43,200 into the ISA,with a monthly interest option available for those requiring a regular income. Transfers in are permitted into the ISA, which matures on 30 November 2011. Withdrawals are available during the term, but must be payable by cheque and will be subject to a 120 days' loss of interest penalty.
Sainsbury's up's rate
Sainsbury's Finance has increased the rate on its Online Saver account to 3.20pc. The rate is guaranteed for 12 months, provided savers invest between £1,000 and £500,000 into the account and no more than three withdrawals are made during the first year. If more than three withdrawals are made or the account balance falls below £1,000 or goes above £500,000 then the standard interest rate of 0.50pc is payable.
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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