Kick start 2015 with a top savings rate
Savers should keep a sharp eye on their rates this year, as rate cuts continue.
For new savers the best easy access account comes from ICICI Bank Super Savings, The AA Internet Savings and Post Office Online Saver issue 13, all at 1.4% before tax (1.12% after tax).
Others including Coventry Building Society also pay 1.4% (1.12%), but restrict the number of withdrawals you can make from your account each year.
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%).
On tax-free cash Isas you can earn 1.5% from a Post Office Premier Cash Isa easy access account. The rate includes a 0.85 percentage point bonus for the first 18 months.
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.
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 pay 1.85%.
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.