Many Cash ISAs move at a variable rate tracking the Bank of England base rate. However, recent dramatic cuts in base rate have seen interest rates fall to a historic low. In this low rate environment, it means that it could be time for savers to consider a Fixed Rate Cash ISA, which guarantees a rate for a set period.

A Cash ISA is a tax-free savings account. You put your money into a Cash ISA much like a normal savings account but the interest will not be subject to capital gains tax (CGT) or personal income tax liability, However, it is important to understand that your tax free cash allowance is limited to £3,600 each tax year.

Different products allow you to invest your cash in an ISA in the form of a one-off lump sum, multiple lump sums or smaller regular payments. Although the amount you can save each year is limited to £3600, any sum you put away retains its tax free status, allowing you to grow your tax free balance each year. However, if you decide not to use your allowance in one tax year, you cannot roll it over to the next – so basically use it or lose it! So make sure you put away any sum for the 08/09 tax year before the new tax year begins in April.

Savers with Variable Rate Cash ISAs should keep a close eye on interest rates to ensure they know what they are earning on their savings. In addition, it could be beneficial to look at other deals out there in the savings market, as you could be missing out.. Fixed Rate Cash ISAs on the other hand provide an alternative to this by guaranteeing you a rate for a set period, so savers will know exactly what return they will get on their balance.

A fixed rate deal can offer security during uncertain economic times. By acting fast you can fix the rate on your savings to get the best deal possible during the current economic downturn.

1 Year Fixed Rate Cash ISAs will provide different options for managing your account whether this is by phone, branch, post or online. In addition, when opening a 1 Year Fixed Rate Cash ISA you may also have the option to transfer in cash from your existing ISAs.

There is much to consider when it comes to investing in a Cash ISA account, but it is good to know that there are many good deals and interest rates available for savers through Fixed Rate Cash ISAs.

Andrew Regan writes for a digital marketing agency. This article has been commissioned by a client of said agency. This article is not designed to promote, but should be considered professional content.


Article from articlesbase.com

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