The best cash ISAs for the new tax year

We all love saving tax-free, so which cash ISAs are cream of the crop for the new tax year?

Many people don't use their annual ISA allowance until the tax year is almost over. I suspect that a lot of our readers have applied for an ISA at the last minute at least once in their lives.

But you don't need to leave it to days before April 5th this time round. We all got a new brand new allowance on April 6th, so why not apply for an ISA nice and early, and take full advantage of tax-free saving? After all, the longer you leave it, the more you'll be losing to the taxman.   

So, I'm looking out for the best cash ISAs for the new tax year. Here's what I've come up with:

Best instant access ISA

If you need an account you can dip into in an emergency without paying a nasty penalty, then Barclays has the answer with the Golden ISA. This was the best buy in March and, encouragingly, it still is with a market-leading rate of 3.61%, including a 1% bonus for the next 12 months.

It's a good idea to check whether the rate is still competitive once the bonus has disappeared though. Some best buy accounts with variable rates have a habit of deteriorating over time. So, keep your eye on the ball and make sure the Golden ISA stays golden!

Don't forget, you only need £1 to get started so this ISA is perfect for smaller savers.

Best regular saver ISA

There are two great choices for regular savers: The First Direct Regular Saver ISA and the Principality Building Society Fixed Rate Regular Saver ISA.

I mention two here because the First Direct ISA comes with a catch; it's only open to you if you bank with First Direct and you already have a 1st Account current account. If that's not a problem - or you're planning to switch to First Direct anyway - you could earn a fabulous 7% on savings of £25 to £300 a month. Even better, this great return is fixed for a year.

So, on to my second choice for non-First Direct customers; The Principality Regular Saver ISA pays a pretty decent rate of 5%. Your return is fixed until 5 April 2010 and you can save between £20 and £300 a month.

But there are a few things to keep in mind with regular savers:

 - The rate will almost certainly drop off at the end of the fixed rate period, so you'll probably need to move your savings somewhere more competitive this time next year.

- These ISAs won't be any good for you if you need access because you can't make any withdrawals during the fixed rate period

- And finally, don't miss any monthly payments because your regular saver ISA will close and be moved into a variable rate ISA which pays a lower rate.

Best fixed rate ISA

If you have a lump sum to put away and you don't want to muck about with continually chasing the best rates, why not go for an ISA with a fixed return instead?

The top pick at the moment is the Leeds Building Society 5 Year Fixed Rate ISA (Issue 10). The great thing about this bond is that it allows some access which is pretty unusual for a fixed rate ISA. In fact, you can draw up to 25% of your capital without triggering a penalty.

And it pays a top guaranteed rate of 3.50%. Although this is competitive today, you'll need to decide whether you think it'll stay that way over the coming years.

The base rate might be at a record low of 0.5% right now, but if savings rates average out at say, 5% over the next five years, you'll wish you'd taken your chances with a variable rate instead.

If five years sounds like too much of a commitment, you could go for the top one year Cash ISA Bond from Bank of Cyprus UK which pays 3.20% fixed until 10 April 2010.

Best ISA for transfers

If you have old ISAs which you opened in previous tax years, you'll probably find the rates paid on that money now doesn't measure up well against the competition. But you can transfer your way to a better return by moving your ISAs somewhere new.

The trouble is some of the market-leaders won't accept transfers. But one that will is the Manchester Building Society Premier ISA 45 (Issue 1) which pays a decent rate of 3.56% on old and new ISA money, including a bonus of 0.80% for the first year.

You'll need to open the ISA with a minimum of £1,000 and give 45 days' notice if you want to dip into your cash.

So, that sums up my top choices for ISAs in 2009/10. If you want to find out more, check out the lovemoney.com ISA centre.

More: Open an ISA or you could lose £2,750 | How to pick the right cash ISA for you