New £20,000 Isa allowance – flurry of increases on fixed-rate bonds

8 August 2017

New banks are behind a flurry of increases on fixed-rate bonds and easy-access accounts.

Ford Money has raised the rate on its Flexible Saver to 1.12%.  The new rate applies both to existing and new savers.  Elsewhere, Paragon Bank has launched its Limited Edition Easy Access 3 account at 1.15%. 

But, the best deal comes from Ulster Bank at 1.25% on its e-Savings account, followed by RCI Bank and Shawbrook Bank at 1.2%.

On fixed-rate bonds the top rate for one year is 1.9% from Shawbrook Bank followed by 1.85% from Atom Bank and 1.81% from newly launched bank PCF. 

The best two-year rate is 2.05% available from Paragon, Shawbrook, United Trust and PCF. 

On tax-free cash Isas, Ford Money has raised its one-year fixed rate deal to 1.2%, just behind the top deal of 1.22% from Bank of Cyprus. Mansfield Building Society and Paragon Bank also pay 1.2%.

For two years you can earn 1.35% with Virgin Money or Shawbrook Bank or 1.33% with Ford Money. 

The top easy-access cash Isa rate is 1.05% with Leeds Building Society Limited Edition Online Access Isa. But bear in mind that this rate only lasts until October next year. 

The second-best payer is Virgin Money at 1.01% but the number of withdrawals is limited to three times a year. Ford Money pays 1% with no withdrawal restriction or bonus.

How to beat inflation

To beat inflation, currently running at 2.6%, compromises need to be made as all of the small number of regular savings accounts that pay more than inflation require savers to have a current account with the provider. Moneywise regularly keeps tabs on the savings market and nine accounts that currently beat inflation.

This article was originally published on our sister website Money Observer.

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