11:12 24 April 2013
If you took out an easy access cash ISA a year ago and it had a bonus rate built in, the interest rate could be about to plummet, leaving you with returns of next to nothing on your cash.
But, rather than putting up with this, fight back by transferring your money to a better-paying cash ISA immediately. The Cheshire Building Society ISA Saver is currently the market leading account that's open to everybody, paying an annual equivalent rate of 2.30% (tax-free).
Here, we take a closer look at what the account offers to see whether it's right for you.
What's the deal?
The Cheshire Building Society ISA Saver pays an annual equivalent rate (AER) of 2.30%, making it the market-leading easy access cash ISA that's open to everyone.
The rate is variable, which means it could change at any time, and it includes a 1.80% fixed bonus until October 31, 2014. After this, the interest rate falls to 0.50%.
To open the account you will need a minimum deposit of £1,000, but you can transfer in these funds from existing cash ISAs. You can also add to your savings whenever you choose to - up to this tax year's cash ISA allowance of £5,760.
Withdrawals are permitted, but only by sending off an ISA cheque withdrawal form by post after which you will receive back a cheque - also by post.
Who's it good for?
The Cheshire Building Society ISA Saver is ideal for anyone looking for a new home for their tax-free savings. If your existing cash ISA is paying next to nothing in terms of interest, this is a great account to transfer your money to.
It's also a good choice for anyone who still wants to access their funds and who wants to be able to add to their savings whenever they can afford to.
One of the catches with the Cheshire Building Society ISA Saver is the fact that you can only manage the account by post. This means that when you need to pay in extra money or make withdrawals you'll need to do it by snail mail which can be a slow and laborious process.
That said, it pays to deposit your full cash ISA allowance of £5,760 in the account as soon as possible to maximise the tax advantages.
What's more, if you've paid in your full ISA allowance and then withdraw money, you can't top it back up again in the same tax year. So it's actually better to leave your ISA funds untouched wherever possible. Keep some extra money in an easy access standard savings account that you can dip in and out of whenever you need to.
Another catch with the Cheshire Building Society ISA Saver is that while it's the market-leading cash ISA that's open to everyone, it's not the market-leading cash ISA overall. For example, it can be beaten by the First Direct Cash ISA paying 3.00%. However, you will only earn this top rate on balances over £40,000 and you must hold a First Direct 1st Account to qualify.
Alternatively, the Nationwide Flexclusive ISA pays 2.50%, including a 1.00% bonus until November 30, 2014, but again, you will need to be a Nationwide current account holder to qualify. The account can be opened with £1 but it doesn't allow transfers in.
The £1,000 you need to open the Cheshire Building Society ISA Saver could also prevent some people from applying for the account. If your balance drops below the £1,000 mark, the interest rate will fall to 0.25%.
Also don't forget about the fixed bonus rate. Once this expires on October 31, 2014, the interest rate will plunge to 0.50% and you will need to find a new, better-paying home for your money.
What's the verdict?
If you're looking to transfer existing ISA funds into a new cash ISA and you're happy to operate the account leisurely by post, the Cheshire Building Society ISA Saver is the best paying straightforward easy access cash ISA you will find on the market.
However, if you can't afford the £1,000 deposit requirement, the Nationwide Easy Saver ISA can be opened with £1 and pays 2.25% including a 1.75% bonus until October 31, 2014. But transfers in aren't permitted. Alternatively, the BM Savings ISA Extra Issue 5 pays 2.10% (including a 1.60% bonus for 12 months) on balances between £1 and £14,999.99 and 2.25% (1.75% bonus for 12 months) on balances over £15,000. You can transfer in funds from existing ISAs.
Never withdraw money from your existing cash ISA to transfer it as by doing so you will lose its tax-free status. Instead, when you apply for your new ISA, inform your new provider you plan to transfer money in from an existing ISA and fill in a transfer form.
Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.
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