SYLVIA MORRIS: A huge cash Isa battle has erupted – these are the savings accounts I’d bag right now… before the Budget raid that’s coming

An  unheralded mid-season cash Isa battle has erupted in the past week, ahead of what could be a seismic change for tax-free accounts in the Budget.

The amount you can put into cash Isas each year is under threat and could be cut from its annual limit of £20,000 to £10,000.

But fierce competition has reignited among big banks, building societies, and investment platforms with several newcomers launching tax-free accounts for the first time. They’re keen to hoover up cash from households dashing to put as much money into tax-free wrappers as they can, to prepare themselves for potential Budget raids on their savings.

It means you can earn the same rates on Isas as on taxable accounts – normally Isas pay less.

Not all the new accounts appear in my star buy tables because they have strings attached. But if you are willing to abide by the rules, and are prepared to move your money when the bonus runs out, they are attractive.

Next week’s Budget could see the annual cash ISA allowance halved from £20,000 to £10,000

Atom has launched its first cash Isa, a straightforward easy-access account available through its app and paying 4 pc.

But investment platform Hargreaves Lansdown (HL) trumped it with a spectacular 4.55 pc through an easy-access cash Isa where the deposit taker is Shawbrook Bank. This is via HL’s Active Savings platform. They both come with no withdrawal restrictions or short-term bonuses.

Trading 212 quickly upped its easy-access cash Isa rate (available on its app) to 4.56 pc. But this rate includes a 0.71-point bonus paid for a year. Once it goes, the underlying rate drops to a less attractive 3.85 pc.

On fixed rate cash Isas, Investec came into the market for the first time with a one-year fixed rate cash Isa at a then top 4.27 pc only for Vida Savings to up its offer to a whisker more at 4.28 pc. Even the big banks are competing. NatWest pays 4.2 pc on its one-year fixed rate Isa, not that far behind the top rate from Vida Savings.

Barclays has altered its systems so that you can open more than one cash Isa with it in a tax year – other big banks say just one – and upped the rate on its one-year fixed to 4 pc.

It’s particularly important to use as much as you can of your £20,000 allowance as according to broker AJ Bell, an estimated 2.65 million of us will be stung for tax this year on our savings in ordinary accounts.