Yahoo News Savings rates rise as more providers gear up for new ISA season
More providers are offering higher rates for cash ISAs as the new tax year comes into view.
Analysis of the savings market shows that so far this month, 22 providers have increased rates or launched new deals.
According to moneyfacts.co.uk, overall, interest rates across the market have risen for 14 consecutive months.
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The number of rises continue to outweigh cuts, says moneyfacts.co.uk, which recorded 126 rate rises and 46 rate cuts in February.
Nationwide leads the way heading into the new tax year, launching a table-topping 1.30% on its easy access ISA.
20 Mar 2018 – best easy access ISAs | 20 Mar 2017 – best easy access ISAs | |||
Provider | Gross rate at £10k | Provider | Gross rate at £10k | |
Nationwide BS | 1.30% | Virgin Money | 1.01% | |
Shawbrook Bank | 1.25% | NS&I | 1.00% | |
Al Rayan Bank | 1.22% | Skipton BS | 0.90% | |
Virgin Money | 1.21% | Post Office Money® | 0.90% | |
Nottingham BS | 1.20% | Coventry BS | 0.90% | |
Paragon Bank | 1.16% | AA | 0.86% | |
Deals shown are only available to new customers and may include a bonus. Source: moneyfacts.co.uk
However, with inflation this week shown to be running at 2.7%, and there is not one standard savings account that can beat or even match this figure, said moneyfacts.
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Rachel Springall, finance expert at moneyfacts.co.uk, said: “It’s clear to see that providers have been gearing up for ISA season this year, as there has been a decent amount of rate rises and a much-welcomed improvement to the Best Buy tables.
“A word of warning to savers, though: don’t expect the top rates to be around for too long if you are looking to grab an ISA before the tax-year ends.”
Investing in a cash ISA is less lucrative than a stocks and shares one, though.
The average stocks and shares ISA returned growth of 4.26% over the past year, while the average cash ISA rate returned just 0.97%.
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“It’s also disheartening to see such a gap between fixed rate ISAs and fixed rate bonds, too,” said Springall.
“For example, savers will find that many of the Best Buy two-year fixed rate bonds pay 2% or more, but 2% can’t be found on two-year fixed ISAs.”
Savers can put up to £20,000 into a cash ISA savings account this tax year and pay no tax on the interest they earn.
The new tax year starts on April 6, so those with cash to spare can invest another £20,000, meaning you could put up to £40,000 outside the reach of the taxman.
