If you've been struggling to keep track of your finances over the last couple of years, the chances are you've not had the opportunity to manage your savings very effectively. However, it's really important to make some last-minute changes to your savings pot if you want to make the most of this year's tax-free savings allowance, as the deadline for cash Isas is April 5th 2012. If you still haven't invested your money wisely, compare savings accounts now to ensure you get the best possible rate.
Less than a week left to move money Depositing your savings in a market-leading cash Isa before April 5th is important, as otherwise you'll lose this year's tax-free allowance. You're entitled to deposit £5,340 in a cash Isa this year, with the limit rising to £5,640 for the 2012-13 tax year. With your money safely tucked away in an Isa, you won't have to pay tax on the interest you earn.
Decent deals available despite low BoE rate The Bank of England's base rate may be at a record low, but there are still some decent savings accounts around. For instance, the AA's Internet Access Isa is paying 3.5%, including a 3% bonus for the first 12 months. If you don't mind locking your money away for a few years, you might want to consider a fixed-rate cash Isa such as the Halifax Three-Year Fixed Rate Isa Saver, which pays 4.25% on initial balances of £500 or more.
Consider a stocks & shares Isa Cash Isas may seem like the simplest option, but it's definitely worth considering putting your money away in a stocks & shares Isa. A recent analysis of HMRC data by Virgin Money revealed that the number of cash Isas opened each year is almost 3.5 times higher than the number of stocks & shares Isas, but the latter can be a particularly savvy choice.
For instance, gains of 39.15% (after charges) were enjoyed by investors in the Virgin Index Tracking Trust between December 31st 2008 and December 31st 2011.Virgin Money's Scott Mowbray suggests: "Adopting a mix-and-match approach using both cash and stocks & shares Isa allowances, depending on what you are saving for and what you can afford, can help you get the balance right between rainy day money and saving for the future."
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