The fascinating war waged between ISA providers is set to come to an end as the tax year draws to a close.
Ahead of the Thursday 23:59 deadline, what can savers do in this final week to ensure that they maximise any of their remaining tax-free allowance for this tax year?
New Cash ISAs
Savers are only able to pay into one cash ISA in any tax year. Those who have not already paid into an ISA during this tax year have a small window of opportunity to open a new ISA.
The heavy administrative demands mean that different institutions are operating different deadlines for their products. For Which4U’s ISA listings, the deadline information is as follows:
Cheshire BS: DirectSave Cash ISA [3.50%] / 18-month Fixed-Rate [4.00%]
Market-leading rate. Accessible to new customers. Extended bonus. No transfers.
The deadline for new applications is today (2nd April). Funds paid into the account by cheque to be received by 5th April.
Nationwide: e-ISA [3.10%]
Strong performing. Extended bonus. Transfers. Current account holders.
Deadline for online applications is today (2nd April). Funds must be entered before midnight on Thursday. Branch-based ISAs are available to apply for in person until Thursday.
Principality: e-ISA [3.10%]
Strong bonus rate. Fully accessible.
The deadline for funding new ISAs by cheque has already passed.
It is still possible to open this account and fast-track payments to arrive by April 5th.
Barclays: Loyalty Saver Cash ISA [3.05%]
Strong standard rate [Longevity]. No transfers. Existing customers.
Existing customers: online applications close at 23:00 on Thursday.
New customers: open an account in-branch until close of working hours on Thursday.
Natwest: e-ISA [3.00% – 3.50%]
Competitive rates. Big rates for high deposits [above £10,000 and £30,000].
The NatWest website is advising new customers that it is unlikely that their ISA will be open in time for the end of the tax year.
Halifax: ISA Saver [3.00%] / Fixed-Rate ISAs [3.50% – 4.50%]
Decent bonus rate. Prize-draw entry. Market-leading fixed-rate bonds.
Online applications must be funded before midnight on Thursday.
Branch applications will be received until 7pm on Thursday.
With some institutions ready to close off applications for ISAs in this tax year by the end of today, it is now or never for the best-rate products within this tax year. Apply now through Which4U.
Cash In and Transfer
Any unused annual allowance does not carry over to the next tax year. Those with an existing ISA might consider opting for security and topping this up instead.
This will ensure that savings are secured in the tax-free environment for this tax year, and they can always be transferred to a better performing ISA at a later date.
The Ombudsman reports that there are many cases at this time of year when banks, overrun with demand, fail to execute new ISAs in time. Leaving the decision to open a new ISA until the last minute often causes savers to lose their annual entitlement.
Cue a number of irate complaints. And if the institution has not made errors in its administrative processes, the Ombudsman will not always side with consumers.
Even though savers can only pay into one cash ISA in any given tax year, transferring ISA funds from previous years do not count as ‘paying in’, and therefore do not contribute towards the yearly ISA allowance.
We’ll be commenting more on ISA transfers in the near future, though the recent Which4U Guide to Transferring Cash ISAs should be a useful starting point.
For those on the brink of a decision: by all means, apply for your ISA if you’re confident that all the funds that you wish to deposit into a tax-free environment can be safety stowed into time.
As a plan B: though not all providers will offer the new rates into the next tax year, you can always secure your funds into an existing ISA over the next few days, safe in the knowledge that it can be transferred at your leisure with no risk to your new cash ISA allowance.