28 Mar 2019
Time is running out fast if you want to invest tax-free with an Individual Savings Account in the current tax year.
The maximum you can put into ISAs in the 2018-19 tax year is £20,000, but the deadline is Friday, April 5.
Moneyfacts reports that ISA providers are pulling out all the stops - cash ISA rates are rising and product choice has already surpassed last year's peak.
There were 399 ISAs to choose from last April, but the financial services company says 415 deals are currently available.
Not only that, but rates are increasing.
The average one-year fixed rate ISA now stands at 1.37% - up from 1.12% in March 2018 and 1.16% in April 2018.
Moneyfacts adds that a similar pattern can be seen in both longer-term and no-notice ISA rates.
Rachel Springall, a finance expert at the financial services firm, said: "The latest ISA season shows great signs of improvement, with the choice of deals already breaking the levels seen during the peak in 2018.
"It is encouraging to see providers fully on board with ISA season this year, with some launching market-leading rates to grab the attention of keen savers."
Moneyfacts also points out that closed ISAs - those no longer accepting new business - pay less than their ‘live’ counterparts, so if you've been saving into the same ISA for years, you may be missing out on a higher return.
The average no-notice ISA rate on a closed account is reported to be 0.81%, whereas ‘live’ deals return 0.96%, so it could pay to compare the options and see what else is out there.
The financial services company says that a concern for some savers could be that fixed-rate ISAs are typically paying less than standard fixed-rate bonds, but it adds that the long-term benefits of saving within an ISA wrapper means this perhaps shouldn't be too much of a concern.
There are a variety of types of ISA to choose from, including: cash ISAs; stocks & shares ISAs; innovative finance ISAs; lifetime ISAs; help-to-buy ISAs and junior ISAs.
Moneyfacts says stocks & shares ISAs allow you to invest in the stock market, which means there's the potential for far greater returns than cash ISAs.
But it adds: "However, this also ups the level of risk involved, so this route should only be considered by those who are comfortable with that and can afford to lose some of their savings should the market not perform as well as they'd hoped."
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