There are just a few short weeks left for you to take advantage of the 2009/10 ISA allowance so it’s use it or lose it time.

If you’re planning to open a cash ISA before the tax years ends on April 5, where can you find the best rate? Well, it depends on how much you have to save. You can only save £3,600 a year in this kind of tax-free account, or £5,100 if you’re 50 or over on or before April 5.

When the new tax year starts on April 6, everyone benefits from the higher allowance. However, you can transfer a balance from previous tax years and having more to invest can often bag you a better rate.

For example, if you have £9,000, Santander is offering a rate of 3.00% on its Direct ISA Issue 3, but you’ll earn just 2.00% on anything less than £9,000.

This year’s tax allowance

If you haven’t already used your ISA allowance, you’ll want the best rate possible for this year’s £3,600, so where are the best cash ISA deals for that amount? Standard Life Bank’s Direct Access ISA pays 2.65% and there’s no limited bonus period, so your returns won’t plummet after a year. The minimum deposit is £1, so if you can’t put aside the full allowance, you can save as much as you can.

Alternatively, Barclay’s Golden ISA pays a competitive rate of 2.58% and, again, there’s a minimum deposit of £1. However, if you do have money in a cash ISA from a previous year, this cannot be transferred. The next best rate for an investment of £3,600 or less is 2.50%, which is offered by Intelligent Finance, first direct and ING Direct.

Be careful with withdrawals

Don’t forget, if you do have a balance from a previous year and want to transfer it, you mustn’t withdraw it and close the old account. If you take a previous year’s balance out of the cash ISA, you’ll lose the tax free-status on the cash. Check if your chosen new ISA accepts transfers and ask the bank or building society to move the money into your new account.

Better Money Advice - Bringing you the best money saving deals on 2-4-1 restaurant vouchers, plus the best money advice. Best Loan Deals, Best Insurance Deals, Credit Card Deals & more Money Saving Deals Online- Bettermoneyadvice.co.uk.

Not what you are looking for? Search Better Money Advice for the Latest Money Saving Deals & News