Coventry Building Society has taken the battle of the best buys to a new level – not only increasing the rate on its 5 year fixed rate ISA to 2.15% tax free/AER, so that it equals the top spot, but also passing that increase on to existing holders of the Fixed Rate ISA (49) 30.11.2022.
This is not the first time a provider has passed on a rate rise to existing fixed rate customers, in fact a couple of weeks ago Coventry increased the rate on its Fixed Rate ISA (48) 30.11.2018 as well, to elevate it on the 1 Year Fixed Rate ISA best buy table.
And just yesterday, while not an ISA increase, Kent Reliance improved the rate on its 1 year fixed rate bond – issue 49, from 1.79% to a market leading 1.85% gross/AER - once again for new customers and those who have already opened this bond.
It remains unusual for a fixed rate product to be increased – but obviously great news for those savers that have benefitted.
Like other savings products, the cash ISA market has been boosted by challenger banks entering the market place. A well needed boost to an old stalwart, whose popularity appears to be fading.
In fact, best buy rates on fixed rate ISAs have increased by even more than fixed rate bonds so far this year; over 30% on all but the less popular 4 year term.
It’s really encouraging to see the battle of the savings rates including the cash ISA market – particularly for those who have diligently used their ISA allowance each year, or for those looking to switch from stocks and shares into cash. Let’s hope the momentum continues into the ISA season at the beginning of next year, especially if there is a base rate rise.
While cash ISA rates still remain lower than the non-ISA equivalents, hopefully more competition will narrow this gap and make the cash ISA more valuable once again.
Check our best buy tables to see if you could be earning more.