The great cash Isa split

There was a time when cash individual savings accounts (Isas) were simple - all you needed to look for was the best rate. However, new parameters are being quietly set, which means that savers with large holdings will be forced to split their Isa pot into two or more accounts.

This year Moneyfacts.co.uk has spotted a growing trend of cash Isas launched that refuse to accept transfers in.

Providers say they can only offer headline rates if they set a limit on how much money they can accept and that limit will be reached too quickly and by too few people if they open the doors to transfers in.

Sylvia Waycot, spokesperson for Moneyfacts.co.uk, said: "Many people have Isas going back several years and they will naturally want to ensure that the whole of their Isa pot gets the best return.

"That will not be as easy under this new trend as many of the Isas refusing transfers in are best buys. Taking one of these accounts means splitting your Isa pot into at least two accounts, potentially with two providers paying two different rates."

That will also mean additional paperwork for investors, but will be worth it if you have substantial cash holdings. A saver who has put the maximum into cash Isas since they were launched in 1999 could be sitting on £45,000 plus accrued interest.

Isas for the forthcoming tax year begin to be launched in February each year, so set a diary note to start your hunt for the best rates that month.

visible-status-Standard story-url-YourMoney_Side_CashIsas_040512.xml