SAVERS can get more for their money if they put their cash in Leeds Building Society’s new top-paying 1.46 per cent easy-access cash Isa. The savings provider offers the same rate as Coventry Building Society, but the latter only allows you to make three cash withdrawals per year. The rival’s account also comes with a […]
SAVERS can get more for their money if they put their cash in Leeds Building Society’s new top-paying 1.46 per cent easy-access cash Isa.
The savings provider offers the same rate as Coventry Building Society, but the latter only allows you to make three cash withdrawals per year.
The rival’s account also comes with a fixed bonus of 0.31 per cent until January 2021, meaning it’ll then drop to 1.15 per cent.
But you can open the Coventry account with just £1 compared to £1,000 at Leeds Building Society, so carefully consider which account is best for you.
The new account allows you to make unlimited cash withdrawals, but if the balance falls below £1,000 you’ll only get a low 0.05 per cent in interest.
The Isa matures on November 30 next year, so unless you move your cash elsewhere beforehand Leeds Building Society will then transfer it to a maturity Isa, which is likely to pay a lower interest rate.
IF you're in the market for a new, better paying Isa, there's one thing you shouldn't do.
Never withdraw money from your Isa account to put it into your new one – if you do it’ll lose its tax free benefits.
Instead you need to follow the simple transfer process.
Make sure that the new account you want to use accepts transfers (not all do) and then fill in the Isa transfer form with the new provider.
It will arrange for your savings to be transferred over, with the process taking no more than 15 working days.
And remember, you can only have one “active” cash Isa per tax year.
The second best easy-access cash Isa offering unlimited withdrawals for those with savings of less than £5,000 is offered by Bath Building Society at a 1.30 per cent rate – this can be opened with just £1.
While the best easy-access savings accounts by Marcus by Goldman Sachs and Virgin Money currently pay interests of 1.45 per cent.
The difference between an Isa and a savings account is that any interest earned on Isa money is tax-free, although you’re only allowed to save up to £20,000 per tax year.
That said, all basic-rate taxpayers get a tax-free personal savings allowance of £1,000 a year, so unless you’ve got loads of cash any interest is unlikely to be taxed (it’s £500 for higher rate taxpayers, while additional rate payers don’t get an allowance).
Rachel Springall, finance expert of comparison site Moneyfacts, told The Sun: “It’s encouraging to see a well-known mutual launching a joint market-leading easy-access Isa as a time where many providers are cutting rates across the market as a whole.
“Those savers who have yet to utilise their Isa allowance may not want to lock down their money right now, so an easy-access Isa is a great choice to provide such flexibility.
“This could be a good contender if savers are looking to build a pot towards a specific savings goal.
“The account also allows transfers in, ideal for those looking to move their existing cash or stocks and shares Isa which may not be up to scratch.”
In January, ICICI Bank launched an easy-access cash Isa paying 1.55 per cent in interest.
While earlier this month, Charter Savings Bank launched a new top-paying 1.62 per cent Isa – but you have to lock away cash for a year.
If you’re thinking about opening an Isa account then you should check out our round-up of the accounts with the best rates.
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