Tax free ISA's for 10/11 tax year ? Rate Dumping

spooky25

hi all

Would anybody out there able to advise on the best course of action to take regarding the new 10/11 tax free isa year as currently I am looking at new rates and I'm getting fed up of being rate dumped half way through the year when I take out a tax free ISA.

I understand that NO Tax Free Isa is rate proof and is liable to drop and rise in accordance to the Bank of England's base rate.

Apart from placing my allowance into a fixed rate bond are there any other ways in which I could gain a higher rate of interest without risking my capital ?

Many thanks Spooky25

Baldur

spooky25 wrote: »

I understand that NO Tax Free Isa is rate proof and is liable to drop and rise in accordance to the Bank of England's base rate.

That's not correct, some have a rate guarantee, for example the Santander/A&L Flexible ISA guarantees BoE base rate +3% for 12 months from opening.

There are also many fixed rate Cash ISAs available, where the rate is fixed for various periods of time, up to five years in some cases.

spooky25

Baldur wrote: »

That's not correct, some have a rate guarantee, for example the Santander/A&L Flexible ISA guarantees BoE base rate +3% for 12 months from opening.

There are also many fixed rate Cash ISAs available, where the rate is fixed for various periods of time, up to five years in some cases.

Hi Baldur thanks for your reply does this mean that when you fix for say 2 years, are these ISA'S tax free? becuase I understand from stuff ive been reading that the fixed rate accounts are taxable unlike the tax free Isa's which last for a tax year then you can either stay with the same bank/building society with the rate they offer or change for a higher rate of interest elsewhere from another Isa provider?

thanks spooky

ultrawomble

Whether you choose a fixed rate ISA or a variable rate ISA, as long as your money remains within the ISA wrapper the interest is tax free.