Tesco Bank moves to the top of best savings tables
Tesco Bank has raised the rate on its Internet Saver to 1.4% before tax (1.12% after tax) for new savers. The rate includes a 0.6 (0.52) percentage point bonus for the first year.
It puts Tesco among the top payers alongside AA Savings and Post Office, both of which pay 1.4% (1.12%) including a bonus for the first 12 months.
Those aged 50 or more can do better with Saga Internet account at 1.55% (1.24%) for the first year.
Meanwhile other top rates continue to disappear, with Sainsbury's Bank cutting its Extra Saver to 1.1% (0.88%) on £1,000, while Santander e-Saver is down to just 0.7% (0.56%) for new savers.
On fixed-rate bonds the top one-year rate comes from Kent Reliance at 1.9% (1.52%), while the best two-year deal is 2.25% (1.8%) from both State Bank of India UK and Shawbrook Bank.
On easy-access cash Isas the top rate remains at 1.55% tax-free from BM Savings and Post Office. Both include a bonus for the first year.
The top rate with no bonus is 1.5% from National Savings & Investments, but you cannot move your existing cash Isas into this account.
Barclays Bank pays 1.49%, but on a minimum £30,000, and Sainsbury's Bank pays 1.45%; both accept transfers.
You can earn 1.7% tax-free fixed for one year with Post Office, or 2% fixed for two years with Barclays Bank and AA Savings.
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.