There are just a couple of weeks left to use this year’s individual savings account (ISA) allowance, and the good news is that ISA providers are busy upping their rates to tempt savers.

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This tax year, which ends on April 5, you can pay up to £20,000 into tax-efficient ISAs, either into a cash account, stocks and shares, or an innovative finance ISA - or you can choose a combination of these. You can also open more than one of the same type of ISA if you want to. For example, you might decide to put some money into an easy access cash ISA which you can dip into when you need to, and some of your other savings into a fixed rate cash ISA, which you won’t be able to access until the end of the account term.

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The best cash ISA rates are usually offered by online savings providers. For example, Tembo’s cash ISA currently pays 4.80% annual interest tax-free and can be opened with a minimum deposit of £10, while Plum’s cash ISA offers 4.78%. This rate shown includes a variable bonus of 1.24% if kept for 12 consecutive months and is for new customers only. This account can be opened with a minimum deposit of £10.

However, if you’d rather choose an ISA which offers you branch access, Yorkshire Building Society this week launched a competitive new range of fixed rate ISAs which can be opened with a minimum balance of £100. The building society’s one-year fixed rate ISA pays 4.15% tax-free interest, whilst the two-year, three-year and five-year fixed rate accounts pay 4.10%, 4.05% and 4.00% respectively. These accounts can be opened online, in branches, by post and for existing customers via the Yorkshire Building Society app.

“ISA season is in full swing so it’s wise for savers to take advantage of the latest deals and utilise their ISA allowance before the 2024/25 tax-year ends, or lose it,” said Rachel Springall, Finance Expert at Moneyfactscompare.co.uk.

If you’re thinking about saving over the long term, and you’re comfortable accepting a level of risk, you might want to consider putting some of your ISA allowance into a stocks and shares ISA instead.

Alice Haine, personal finance analyst at investment platform Bestinvest by Evelyn Partners said: “Remember, cash ISAs might work well for short-term savings goals, but investment ISAs are more suited for long-term savings targets with a time horizon of five years or more – that’s a long enough period to ride out short-term volatility in the financial markets.

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“While speculation that Chancellor Rachel Reeves will tinker with ISA allowances is rife, potentially limiting the amount that can be subscribed into cash, at the moment this is all it is - speculation. Nothing has been confirmed, and no change would be ready to come into force this tax year, which is why savers and investors should ignore the rumours and focus on loading up their ISAs to ensure savings and investments are as tax efficient as possible.”

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