Aldermore ups fixed rates but cuts Isa interest
Aldermore Bank is increasing the rate of interest it pays on two of its fixed-rate savings accounts.
From 10am on Friday 22 May, the rate on the 1 Year Fixed Rate Account will rise to 1.90%, up from from 1.75%, making it the joint top account of its type.
It will also raise the rate on the 2 Year Fixed Rate Account to 1.95%, from the current 1.85%.
Cash Isa reduction
However, what the bank gives with one hand, it takes away with the other. From the same date, it will reduce the rates it pays on its cash Isas.
The rate on the 2 Year Fixed Rate Cash ISA will fall to 1.75% from 1.85% and on the 3 Year Fixed Rate Cash ISA interest will fall from 2% to 1.85%.
On all the accounts affected, there is a minimum deposit of £1,000 and the accounts can be operated online, by post or by telephone. Interest can be paid monthly or annually. For the Isas, transfer in from other providers are allowed.
Simon Healy, managing director for Savings, at the bank said: "It is important for savers to remember in the current environment, if they want to get the best rate and make the most of their savings, then they need to shop around and check rates from banks like Aldermore. Staying loyal to some of the high street banks could unfortunately prove costly in the long run."
Aldermore first opened for business six years ago and total deposits now stand a more than £4.7 billion.
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.