3 quick tips when choosing a CASH ISA

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   With the end of the tax year upon us and the £10,200 ISA allowance disappearing we give you some quick tips on choosing the best cash ISA for those of you that want to take advantage of this low risk tax free product.

Cash ISAs are simply cash accounts which earn the tax benefits of the ISA wrapper and are therefore amongst the most straightforward products in the financial market. The capital in a deposit account will not grow, but the value will not go down and will earn interest for the entire time it is invested. Therefore, in order to find the best one, you would generally just need to look for the highest interest rate.

However, there are some differences to be aware of so we thought we’d put this little blog together to help you choose the right one for you. 

Tip no. 1 - The highest rate now may not be the best rate longer term. 

It’s fairly common practice for cash ISA providers (typically banks and building societies) to provide a high introductory rate to entice savers. Make sure you are aware of when this higher introductory rate ends so your money gets a competitive rate throughout. 

Tip no.2 - Be prepared to keep checking rates on a regular basis 

For those of you that want to chase the best rate then keep your eye on the ISA rates being offered. Due to the incentivised rates mentioned above be prepared to move your money around or you might find your rate going from the most competitive to one of a meagre return. 

Tip no.3 - Read the small print 

Always read the small print to see what, if any, rate guarantees and caveats apply. Some providers might tie your money up for a period of time. These accounts pay higher rates because the provider can plan their own investments better – but you may have to wait up to 90 days if you make a withdrawal. Some providers also offer great ‘ads’ to get you in but then you find the ‘brand new customers only’ rule applies.

 In essence, even the seemingly simplest of products needs some research. Make sure you make the right choice before you get tied in.