Savings update: Shawbrook raises top-paying cash Isa rate
Shawbrook Bank has raised the rate it pays on its one-year fixed rate cash Isa to 1.5%.
The next best deal comes from Co-op Bank with its Britannia Fixed Rate cash Isa at 1.4%. For two years Shawbrook pays a top 1.6% and Co-op Bank 1.5%.
The rates are marginally ahead of the 1.3% best easy-access cash Isa rate from Coventry BS and Sainsbury's Bank. You can transfer your existing cash Isas to all these accounts bar the Coventry Easy Access Isa.
On taxable accounts the top rate on easy-access accounts at 1.45% before tax (1.16% after tax) comes from French-owned RCI Bank while Shawbrook Bank pays 1.25% (1%). Both accounts are only available online.
Other top deals
On the high street National Counties Building Society pays 1.26% (1.01%) and Coventry BS 1.15% (0.92%).
On taxable fixed-rate bonds, the best one-year deal comes from RCI Bank at 1.65% (1.32%). Charter Savings Bank and Swedish-owned Ikano Bank both pay 1.6% (1.28%).
Tesco Bank has raised its two-year deal to 1.8% (1.44%), just behind the top 1.9% (1.52%) from RCI Bank.
This article was originally written for our sister publication, 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.