National Counties BS tops internet-based savings rates
The small National Counties Building Society has raised the rate on its Online Saver to 1.41% before tax (1.13% after tax) from 1.17% (0.94%).
The increase places it as the best deal on internet-based accounts, ahead of the 1.4% (1.12%) paid by ICICI Bank Hisave Supersaver.
Post Office also pays 1.4% (1.12%), but the rate includes a bonus so it drops to 0.65% (0.52%) after a year.
On fixed-rate deals the top rates include National Counties at 1.76% (1.41% ), along with Aldermore, Harrods and Shawbrook banks all at 1.75% (1.4%) for a year.
GE Capital pays 1.92% (1.54%) and Harrods Bank 1.95% (1.56%) for 18 months, while the best deal if you are willing to tie your money up for two years is 2.25% (1.8%) with Harrods Bank.
On tax-free cash Isas the top easy-access account rate is 1.5% with Post Office Premier Isa - including an 18-month bonus - and National Savings & Investments.
You cannot transfer your existing cash Isas into the National Savings Account. Barclays pays 1.49%, but only on balances of £30,000 or more.
On fixed-rate cash Isas Virgin pays 1.7% fixed for one year, while at Post Office you can earn 1.95% for two years.
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.