Just five days until Isa deadline

SAVERS have just five days left to use this year’s cash Isa allowance and earn tax-free interest.

The countrywide lockdown in the face of the coronavirus means banks and building societies have shortened opening times to as little as two hours a day to safeguard staff and customers. Some have closed branches altogether. They are also taking longer to answer phone calls and open post.

Most are asking customers not to phone or visit a branch unless it is urgent or essential, allowing them to prioritise the vulnerable.

So if you do not already have a cash Isa, you need to open an account online to beat the deadline and don’t leave it to the last minute.

Robin Fieth, chief executive of trade body Building Societies Association, says: ‘Many societies are opening branches for essential services only. Opening Isa accounts may well not fall into this category.’

A spokesperson for banking trade body UK Finance says: ‘Firms are constantly updating websites. We encourage only those who are facing an immediate issue with their finances to call their provider.’

You can put up to £20,000 into a cash Isa this tax year, which ends on Sunday.

You will get another £20,000 allowance for next tax year, which starts on April 6.

If you don’t use your cash Isa allowance for this tax year, you will lose it as you cannot carry it over.

With interest rates falling, experts say that fixed-rate accounts are the best option — as long as you are willing to tie your money up.

These will allow you to shelter your money from any rate cuts ahead.

With the Bank of England base rate now at a record 0.1 pc low, and another cut not ruled out, variable rate easy-access accounts could end up paying next to nothing.

Any top rates are highly likely to fall in the next couple of weeks.

Some providers have already cut rates following the 0.65 pc plunge in base rate last month. Halifax, for example, now pays just 0.05 pc on its Isa Saver Variable.

The best one-year fixed-rate deal is Virgin Money Fixed Rate Cash Isa at 1.36 pc, fixed until April 24 next year.

Other top online Isa accounts include Charter Savings Bank, Kent Reliance and Paragon banks, all at 1.35 pc.

For two years, Charter Savings Bank pays 1.46 pc, with Kent Reliance and Paragon close behind at 1.45 pc. Coventry BS pays 1.35 pc fixed until May 31, 2022.

On easy-access Isa accounts, Coventry BS pays 1.25 pc online and has a reputation for not cutting rates to the bone.

Virgin Money pays a higher 1.31 pc on its Double Take E-Isa but limits you to making two withdrawals a year.

Another alternative is to open an easyaccess account with your existing provider and move your money to a better account when the dust settles.