Savings rates fall to end 2014
Rates for savers have continued to fall this year. The top easy-access cash Isa rate comes from Post Office Premier Cash Isa at a tax-free 1.5%. A year ago Post Office paid 1.8% to new savers opening this account.
The current 1.5% includes a 0.65 percentage point bonus for the first eighteen months you are in the account.
Top deals with no bonus include Barclays Bank Instant Cash Isa issue 1 at 1.49% on a minimum £30,000 or Sainsbury's Bank at 1.45%.
All three accept transfers from other providers. National Savings & Investments pays 1.5% on its Direct Isa but you cannot move the cash Isas you hold with other providers into this account. It is open to new cash Isa money only.
Fixed-Rate Cash Isas
On fixed rate cash Isas, the best one-year deal is 1.65% from both Tesco Bank and Virgin Money. For two years Post Office pays a fixed 1.95% and both Kent Reliance and Aldermore Bank 1.85%.
On taxable easy-access accounts ICICI Bank Super Savings, AA Internet Savings and Post Office Online Saver issue 13 all at 1.4% before tax (1.12% after tax). Both AA and Post Office accounts include a bonus only payable for the first year after which the rate drops substantially.
On fixed rate bonds the best one-year deal comes from State Bank of India at 1.8% (1.44%) while Paragon, Kent Reliance, Aldermore and Harrods Bank all pay 1.75% (1.4%). The top two year deal is 2.33% (1.86%) from Secure Trust Bank while State Bank of India pays 2.25% (1.8%).
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.