Cheshire BS grabs best buy cash ISA spot

Nationwide subsidiary Cheshire Building Society has recently grabbed the top cash ISA spot with its new 3.06 per cent interest rate best buy in the opening salvo of the ISA wars that rage every spring, experts say.

The new Cheshire deal, which eclipses both Newcastle BS and AA Savings by 0.01 percentage points, now stands as the savings product with the best rate of return for savers yet to spend their tax-free savings allowance for this year.  Nationwide, the provider of personal and business bank accounts  that is Cheshire’s parent company, does offer a best buy of its own in the form of its 3.1 per cent instant access ISA, but carries a minimum of balance of £25,000, leading savers to transfer cash in from previous years’ savings pots.

The Direct Cash ISA can either opened over the phone or online, but can only be managed by post.  However, ISA account holders may make withdrawals without penalty or limit, though savers need to be aware that 2.06 percentage points of its best buy rate are a bonus rate that only lasts until the end of September 2013.

Savers often wait until the last minute to use their yearly ISA allowance, as savers who contribute to one cash ISA this year already are barred from opening another.  Banks capitalise on this fact as the tax deadline approaches by bringing out the proverbial ‘big guns,’ with providers fighting to gather the most in deposits before April.

A savings expert recently commented on the new deal from Cheshire BS, stating that if a saver has not yet used their cash allowance for the 2011-2012 financial year, they could do worse than choosing the current best buy.  However, waiting for the height of the ISA rush may prove to be more prudent, as rates usually peak late into March or even right at the beginning of April, and could result in savers getting even better deals.

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