Britain's Best Cash ISAs

Interest rates on Cash ISAs are on the increase in the wake of the Bank of England's base rate rise.

The other day I encountered a 17-year old schoolgirl who was fanatical about saving. Her part-time job pays her the rather princely sum of £140 a week and she saved most of it. To say I was gobsmacked is an understatement but then I suppose I don't know that many teenage girls or what they do with their money, whether it's an allowance from their parents or earned income.

Nevertheless, apart from telling her that I was very impressed, I was able to tell her that as she was over 16, she could take advantage of saving in a Cash ISA. Being able to shelter up to £3,000 a year from the taxman is only one bonus; another is that the rate of interest is usually higher than ordinary savings accounts.

So, where should she look? As always, Moneyfacts springs to the rescue with a list of Mini Cash ISAs that either have or are on the verge of putting up their rates following the recent increase in the Bank of England base rate. Here are the current best buys:

Company	Account	Notice or Term	Deposit	Gross	AER
Saffron Walden BS (wef: Aug 31st 2006)	Mini Cash Tracker ISA 30 Day Notice (postal account)	30 Days	£3,000	5.55%	5.15%
Tipton & Cosely BS (wef: Sep 1st 2006)	Premier ISA (postal account)	30 Days	£3,000	5.40%	5.22%
National Savings & Investments	Direct ISA (internet/ phone account)	None	£1,000	5.30%	5.30%
Portman BS	15 Day Notice ISA	15 Days	£1,000	5.30%	4.90%
Yorkshire BS (wef: Aug 27th 2006)	30 Day Notice ISA (Aug 06)	30 Days	£10	5.25%	5.25%
Yorkshire BS (wef: Aug 27th 2006)	e-ISA (internet only account)	None	£10	5.15%	5.15%

Note that where the 'gross' and 'AER' percentages differ, it means the higher rate is for an introductory period only so if you don't fancy switching your ISA every time the introductory period expires, the Direct ISA with National Savings and Investments looks like the best deal.

Compare savings accounts and get a better rate of interest.