This is the one we’ve been waiting for. The launch of the Santander Cash ISAs is usually an indication of how the ISA season will progress. Unfortunately, this year it has confirmed our fears that providers’ appetite for savers cash remains limited and even the ISA season is not going to improve that – especially for easy access savers.
Once again, existing customers are rewarded with a market leading fixed rate ISA but only for those who have or open a 123 current account, credit card or are a Santander Select customer. For everyone else, the 2 Year Fixed Rate ISA is competitive, especially for a high street provider, but not as competitive as last year when it was the best two year fixed rate available.
That said, the 123 current account is offering an extremely attractive rate of interest for savers if used correctly, so savvy savers may wish to take advantage of both the interest rate on the current account on up to £20,000 for easy access money and therefore access to the market leading two year fixed rate ISA.
In complete contrast to the this time last year, the new easy access Direct ISA saver is paying more than a third less that the current best buy, further demonstrating the lack of competition in the savings market. Last year's offering sailed to the top of the easy access cash ISA table (paying 2.50% tax free), so this is really disappointing.
As with all ISAs and savings accounts in general, it’s important to check the terms and conditions and ensure the account is right for your needs and switch if it’s not offering the best returns. Even in this exceptional time when interest rates are at record low levels, it’s important to get the best rate you can and if possible keep all the interest in your pocket and out of the tax man's.
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