Beat falling cash Isa rates with a 2% fix
Rates on easy-access accounts continue to fall, with Tesco Bank cutting the rate on its Internet Saver to 1.2% before tax (0.96% after tax), while West Bromwich Building Society has closed its WebSaver at 1.35% (1.08%) to new savers.
The rate at Tesco Bank includes a bonus of 0.45 (0.36%) percentage points for the first year you are in the account.
The top easy-access accounts with no withdrawal restrictions come from Virgin Money, Newcastle Building Society, Yorkshire Building Society, Leeds Building Society and Kent Reliance - all pay 1.25% (1%).
AA Savings and Post Office pay a slightly higher 1.3% (1.04%) on their internet-based accounts, but the rate includes a bonus payable for the first year. You can earn more if you are willing to limit the number of withdrawals from your account each year.
For example, Britannia Select Saver 5 pays 1.5% (1.2%) as long as you only make four withdrawals a year. You can earn 1.4% (1.12%) with Yorkshire Building Society Triple Saver but you can only take money out on three days a year.
On fixed rate deals FirstSave pays a top 1.9% (1.52%) fixed for one year while State Bank of India pays 2.1% (1.68%) for two years.
On tax-free cash Isas, the top easy-access deal comes from National Counties Online Cash Isa and Metro Bank Variable Cash Isa, both at 1.65%. There is no bonus on these accounts and you can transfer your existing cash Isas as well.
Santander Direct Isa 6 pays 1.6% for the first year you are in the account.
On fixed rate deals you can earn 2% fixed for 18 months with Halifax, or 2.05% with Halifax and Nationwide for two years.
The best one-year deal, at 1.76%, comes from National Counties Building Society. Coventry BS is offering 2.75% fixed until November 2017.
This article was written for our sister website Money Observer
Invidivual Savings Accounts were introduced on 6 April 1999 to replace personal equity plans (PEPs) and tax-exempt special savings accounts (TESSAs) with one plan that covered both stockmarket and savings products, the returns from which are tax-exempt. The ISA is not in itself an investment product. Rather, it’s a tax-free “wrapper” in which you place investments and savings up to a specified annual allowance where the returns (capital growth, dividends, interest) are tax-exempt (you don’t have to declare ISAs and their contents on your tax return). However, any dividends are taxed within the investment, and that can’t be reclaimed.
This is a mutual organisation owned by its members and not by shareholders. These societies offer a range of financial services but have historically concentrated on taking deposits from savers and lending the money to borrowers as mortgages, hence the name. In the mid-1990s many societies “demutualised” and became banks. One academic study (Heffernan, 2003) found demutualised societies’ pricing on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. In 1900, there were 2,286 building societies in the UK; in 2011, there are just 51.