Virgin and Halifax offer top rates for savers
Halifax has raised the rate on its one-year fixed rate cash Isa for new savers to a tax-free 1.6%.
The move puts it among the top rates on the high street, just behind Virgin Money's 1.71% and Nationwide at 1.65%. If you are willing to run your account over the internet, then Shawbrook Bank pays a higher 1.75%.
For two years Coventry Building Society pays 2.05% fixed until 30 November 2017, while Halifax, Shawbrook and Virgin Money along with Skipton Building Society all pay 2%.
On easy-access cash Isas, National Savings & Investment Direct Isa pays a top 1.5%. But you cannot transfer your existing cash Isas into this account.
The best deals for transfers include Nationwide Instant Isa Saver issue 3 at 1.4%. Virgin Money pays a higher 1.51% on its Defined Access Isa, but you are limited to making three withdrawals a year from your capital.
Fixed-rate bonds and easy-access accounts
On taxable fixed-rate bonds, top deals include Charter Savings Bank at 2.06% (1.65% after tax) and Kent Reliance at 2.02% (1.62%), both for 12 months. For two years you can earn 2.38% (1.9%) with Secure Trust Bank or 2.35% (1.88%) with Aldermore Bank.
On easy access accounts French bank RCI, part of the Renault group, pays 1.65% (1.32%) on its Freedom Account. With this account you are protected by the European deposit scheme, not the UK equivalent. The European scheme gives you €100,000 (around £73,485) cover if the bank goes bust.
BM Savings, part of Halifax, pays 1.6% (1.28%) on its Online Extra issue 18, but this comes with a bonus for the first year, after which the rate drops to 0.5% (0.4%). Kent Reliance High Balance Easy Access account issue 2 pays 1.55% (1.24%) on a minimum £20,000.
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.