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Tomorrow is the deadline to pick-up a tax-free Isa account. Miles Brignall looks at the best deals on offer
Put down the paper now and head down to your local high street. You have only a matter of hours to open the best-rate Isa (individual savings account) and avoid tax on your nest egg before the 2008-2009 tax year ends at midnight tomorrow night.
Barclays is offering this year's highest*-rate cash Isa, paying 3.61%. But if you don't fancy leaving home you can find nearly as good a rate online (and a faster application process) at Marks & Spencer Money, which is paying 3.1%.
If you are new to their benefits, Isas are a great move because they allow savers to put away up to £3,600 a year and, crucially, the interest paid is not taxed at source, as happens with *normal savings accounts. Plenty of Isas will allow you to put in, or take out, your money as required. They make sense to all tax payers, and are a must for anyone on a higher rate (those earning more than around £43,000). If you've got money stashed away in other accounts, you are giving the Treasury more than you need to.
Savers can put £3,600 in an Isa for the current tax year, and the same amount for the 2009-10 tax year, which starts on Monday. Every person has their own Isa allowance, so a husband and wife can put in £7,200 today and £7,200 on Monday, sheltering £14,400 from tax.
So where should you head?
Barclays is top of the best-buy tables with its Golden Isa at 3.61% although that includes a 1% bonus that disappears after 12 months.
Existing Barclays customers who bank online can open one via the bank's website until 11pm on Sunday night. Everyone else needs to go to a branch. The bank says some branches will be opening on Saturday to accept last-minute applications – ring before you travel. Londoners can go to the Piccadilly branch, which is also open on Sunday.
You need to take two forms of ID – one with your picture, such as passport or driving licence, and another with proof of address such as a utility bill.
The bank does not allow customers to transfer in existing Isa funds from other providers. Note that some readers have reported a long-winded application process.
Marks & Spencer Money is probably the best for last-minute telephone or online applications with its 3.1% deal. It is also opening offices over the weekend. It has the advantage that it can all be done from your armchair (or bed) by telephone (0808-002 2222), or via the web. Phone before 5pm today, or until 4pm tomorrow. Online applications can be made today, or until midday tomorrow.
This Isa has the added benefit of allowing transfers in from earlier Isas which may now be paying sub-par rates.
NatWest will be making use of its "SatWest" stance. It will accept applications today for its Cash Isa Plus (3.51%) at the branches that already open on Saturdays. The deadline has passed for phone and web applications for this tax year. New customers will have to open a separate savings account, but £1 will do it. This Isa also does not accept transfers in of balances from previous years.
HSBC is offering its fixed rate Isa (3.1%) in branches until close of play today or until midnight online for existing web customers.
The Abbey Reward Isa pays an attractive 3.5%, if no withdrawals are made. However, the only way to open one for this tax year is by going into your local branch – many of which shut at 12.30pm on Saturdays.
The modern way
ISA transfers – long the bane of savers around the country – are at last going electronic with some major providers.
Moneysupermarket.com says Lloyds Banking Group – with a quarter of the ISA market – plus fellow big players Abbey and the RBS Group are now transferring Isas electronically, which should lead to fewer of the problems seen in recent years.
m.brignall@guardian.co.uk
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