Barclays has dropped the rate on its Golden ISA, which was our top-pick until the change.

From today, new customers will no longer get the 1% point bonus for a year, making the new rate 2.58%. Following the drop, the new best-buy ISA is National Counties Building Society’s Guaranteed Cash ISA, which pays 3.26%. It does not accept transfers from other ISAs, however.

The highest-paying account that accepts transfers is Marks & Spencer’s Cash ISA, which pays 3.1%, including a 1% point bonus until April 2010.

A cash ISA is simply a tax-free savings account. At present, you can deposit up to £3,600 in any tax year (April to April).

From October, anyone who is 50 or above, can put up to £5,100 in a cash ISA, following changes announced in last month’s Budget. Anyone under 50 will only get the extended limit next April.

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Cash ISAs