With ISA season upon us the time has come to find the best ISA rates for 2013.
It’s that time of year again, when banks and building societies traditionally go all out with lots of attractive deals designed to persuade people to make the most of their annual cash ISA limit before the end of the tax year.
However, what’s becoming clear is that this year the annual cash ISA bonanza is going to be something of a damp squib.
Tthe number of Cash ISAs on offer has fallen significantly compared to this time last year. What’s worse, 2013 ISA rates have dipped from an average of over 2.5% to a something more anaemic.
ISA cash allowance 2013
Of course, there is some good news. In terms of ISA limit 2013 sees the annual allowance rise from £5,640 to £5,760. You might also tempt yourself with by topping up with a stocks and shares ISA in which case you can invest up to £11,520.
When you consider that inflation is currently around the 2.7% mark, it’s going to be difficult to find a cash ISA which will keep pace with the rising cost of living. However, this option is at least tax free – pity the poor traditional saver whose savings are taxed – in order to keep pace, they’d need to find a rate well in excess of 4%.
Best ISA 2013/14
However, though the pickings are slim this year, it is still possible to find a few good deals and if you take a look at our own cash ISA comparison tables for a 2013 cash ISA you’ll see a few good deals.
Best fixed rate ISA versus variable
When the pickings are this slim you’ll be looking for any advantage to gain a few extra interest points. One option might be to choose a fixed term ISA. The problem is, you might find yourself having to lock money away for a prolonged period of time.
Some providers also offer attractive initial bonuses, which disappear over time. In a climate of low interest rates, some of those might start to look attractive.
Best ISA transfer rates 2013
One thing to remember with these is to move your money on to somewhere better when the bonus ends. It is possible to move money from one Cash ISA to another although you’ll have to rely on your bank doing this as, if you withdraw the money yourself, you’ll lose the tax free status.
Last, but not least, it’s more important than ever to be an educated customer. Banks and Building Societies know that as a nation we tend not to move money around once we invest our money.
Their hand has been further strengthened by the Funding for Lending scheme which was provided by the government in order to encourage banks to lend money. What it has actually done is nothing more than remove the imperative to attract new savers with competitive interest rates.
If you’ve been with the same provider for some time, it’s likely that your rate is no longer all it could be, so it’s always worth checking around to see if you can find something better.
So all in all, if you’re looking for the best cash ISA 2013 is more challenging than ever before, but that doesn’t mean it’s impossible to find a good deal. Shop around as much as you can, use your power as a savvy consumer to give yourself the best chance of finding a good cash ISA for 2013.
To find out more and to compare ISAs check out our Cash ISA 2013 comparison tables.