Last chance to get an ISA

If you're thinking of opening an ISA this year, you need to do it sooner than you think. Easter is forcing all the banks to push forward their usual ISA deadlines -- here's a round-up of exactly what you need to do to ensure you get your money in on time.

Unless you’ve been on a very long holiday it probably hasn’t escaped your attention that the ISA deadline is fast approaching.

For the last three months the ISA circus has well and truly been in town. Providers have launched new deals aplenty and published zillions of surveys noting what percentage of us do and don’t understand the ISA rules, and how many of us will and won’t be using our allowance this year.

The idea of these surveys is, of course, to make us all aware of the ISA limits and to persuade us all to use our tax-free allowance. For once it’s a win-win -- the providers get a welcome boost to their coffers and we all rush to open an ISA, keeping more of our hard-earned cash away from the taxman’s grasp.

But just in case you are one of the 89% of people who doesn’t understand this year’s ISA allowances and limits (according to Lloyds TSB), here’s a quick reminder:

The total ISA allowance for this tax year 09/10 is £7,200. You can either put all of this in an investment ISA (like a unit trust for example) or you can put up to £3,600 in a cash ISA (a tax-free savings account) and the remaining funds up to the total of £7,200 can go into an investment ISA.
If you are over 50, from last October last year you could have put a little more in this year’s ISA -- up to £10,200, £5,100 of which could be put into a cash ISA (next year this higher allowance applies to everyone).

Which are the best ISAs?

The chart below highlights some of the top easy access ISAs:

Provider and account	Interest rate (AER)	Minimum deposit	Transfers in?	Other conditions
Santander Flexible ISA	3.50% variable	£1	No	Pays 3% above the Bank of England base rate for 12 months.
Barclays Golden ISA	3.10% variable	£1	No	Interest rate includes 12 month fixed bonus of 1%.
Santander Direct ISA	2.75% variable	£9,000	Yes	Interest rate includes 12 month variable bonus of 2.25%.
Alliance & Leicester Direct ISA	2.75% variable	£9,000	Yes	Interest rate includes 12 month variable bonus of 2.25%.
Nationwide e-ISA	2.75% variable	£1	Yes	Interest rate includes fixed bonus of 1% until 30/06/2011.
First Direct Cash e-ISA	2.75% fixed until 31 August 2011	£1	Yes	Rate drops to 0.20% variable on 1 September 2011. Transfers not permitted from other First Direct ISAs.

And here are the top fixed rate cash ISAs for terms between one and five years.

Provider and account	Interest rate (AER)	Term	Minimum deposit	Transfers in?
Post Office Fixed Rate Cash ISA	3%	1 year	£500	Yes
Cheshire Building Society 12 month Fixed Rate Cash ISA	3%	1 year	£100	Yes
Halifax Fixed Rate ISA Saver	3.50%	2 years	£500	Yes
Julian Hodge Bank Fixed Rate Cash ISA	3.25%	2 years	£3,600	Yes
Nationwide 3 Year Fixed Rate ISA	4.40%	3 years	£1	Yes
M&S Money 3 Year Fixed Rate ISA	4%	3 years	£500	Yes
Halifax Fixed Rate ISA Saver	4.25%	4 years	£500	Yes
Julian Hodge Bank Fixed Rate Cash ISA	4.15%	4 years	£3,600	Yes
Yorkshire Bank Cash ISA	5%	Rate fixed until 31.03.2015	£2,000	Yes
Clydesdale Bank Cash ISA	5%	Rate fixed until 31.03.2015	£2,000	Yes

So how long have you got?

Technically the last day to open and fund a cash ISA to qualify for this year’s ISA allowance is 5th April -- but it’s not that simple.

Some providers will need a few days to process and open your account, or you may want to transfer the funds in from another provider and that could take time.

Plus the Easter weekend falls right before the deadline, and the bank holidays on Good Friday and Easter Monday (the 2nd and 5th of April) could mean your application is delayed.

You really need to start thinking about applying for your ISA today. Indeed some deadlines have already passed!

I’ve rounded up the official deadlines from some of the biggest banks and providers, but it’s vital you check with any company you are interested in taking out an ISA with -- and apply as soon as possible!

Compare ISAs now>>

Be warned that with any of the deadlines for applications listed below, you will also need to have funded your ISA before midnight on the 5th, which may require you to transfer money a few days earlier. So bear in mind that the deadlines given below may assume you can fund the account straightaway with cash in a branch, or from another account with the same provider online).

Deadline days

Cheltenham & Gloucester (C&G) is taking branch applications up to 3rd April, though you must be able to fund your new ISA using cash, a cheque, or by transferring from another C&G account.

For Clydesdale and Yorkshire Banks all applications must be received by 1st April to be processed before the deadline.

With Halifax last branch applications are 3rd April and to do this you must be ready to pay funds in on the day by cash, cheque or from another Halifax account. Online and telephone applications can be made up to 8pm on 5th April as long as you can pay in the funds from another Halifax account.

Some HSBC branches are accepting applications until the close of business on 1st April. Some will be open on Saturday 3rd, but you should check with your local branch in advance. It will accept online applications for cash and stocks and shares ISAs up until midnight on the 5th April, and phone applications up to 10pm, but at that late stage you will need to transfer the money from a bank that uses ‘faster payments’ to ensure the funds are received on time (check with the provider currently holding your funds if they do this). Completed postal application forms need to be received back by branches by 1st April.

Lloyds TSB is taking branch applications up to 3rd April and you must be ready to pay funds in on the day by cash, cheque or from another Lloyds account. Online and telephone applications can be made up to midday on 5th April as long as you can pay in the funds from another Lloyds TSB account.

A number of Nationwide branches will be open on 3rd April and it will be possible for customers to open a branch-based cash ISA. But if you want a new e-ISA it cannot guarantee it will be open in time to take advantage of this year’s allowance (as you need to open a card based account with Nationwide before applying). The rest of its cash ISA range can still be opened in time.

Santander’s deadline for branch applications is 3rd April, though you would need cash, a Santander account or to transfer money from a bank using ‘faster payments’ at that late stage. For online and telephone applications the deadline is March 29th if you pass its electronic ID process to ensure there is time to deposit your funds. Some customers are asked to provide further ID during this process, and if this is the case you have missed the deadline for this year’s tax allowance.

Yorkshire Building Society’s last date for telephone and online applications is 25th March and for branch applications 3rd April, although it points out that the customer will need to have the deposit there and then.

Use it or lose it

Once the deadline is gone you cannot get your tax-free allowance back, so use it or lose it.

And with inflation at 3% you would need to find a standard savings account paying 3.75% if you are a basic rate taxpayer, and 4.98% if you are a higher rate taxpayer to stop your savings being eroded.