Time to play the transfer market with cash Isas

Time to play the transfer market with cash Isas

Do you have a large amount of money saved in cash Isas over the past few years but are not tempted by shares or funds? Then you might be interested in the cash Isa operated by Lloyds TSB.

The bank is offering a one-year fixed-rate, tax-free Isa paying a table-topping 6.5%. But there is a catch - that rate is only available if you transfer a balance of at least £9,000.

You will also have to lock the money away for a year.

Interest is calculated daily, and paid at the end of the 12-month period.

There is nothing to stop you opening an account with less than £9,000, but the rate is 5.25%, less competitive than many other offerings.

You can access the 6.5% rate by transferring £5,400 from earlier Isas then paying in the whole of next tax year's allowance - which rises to £3,600 - in one deposit. The offer runs until May 31.

If you are prepared to also open a stocks-and-shares Isa with the same balance, the interest rate paid on the cash Isa rises to 8%.

Abbey is also offering an Isa that allows transfers in from other providers. It is paying 6.25% and the minimum investment is £1.

Barclays also offers a 6.5% Isa but doesn't allow you to transfer in existing deposits.

guardian.co.uk © Guardian Newspapers Limited 2008

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