Act now as Isa rates stall

EXPERTS say there is no point in waiting any longer before using this year's tax-free cash Isa allowance as savings rates are unlikely to rise between now and the April 5 deadline.

- Harvey Jones

Banks and building societies have increased cash Isa rates in recent weeks but now the process has stalled, said Anna Bowes, founder of savings tracking service Savings rate Champion.

Savers can put up to £20,000 in a cash Isa this tax year and can also transfer cash Isas from previous years to secure a better rate. The good news is that with consumer price inflation at 4 per cent in January, and expected to fall further when February's figure is posted this morning, savers are finally getting an inflation-busting return.

By choosing a fixed-rate cash Isa, they can lock into today's rates for up to five years even if inflation and savings rates fall in future, as most experts expect they will.

However, savers must be able to tie up their money for the full term of the bond, as there are penalties for early withdrawals.