The key players this ISA season have been Cheshire Building Society (owned by Nationwide), the AA and Santander who have all held market leading rates for a period of time. Currently Cheshire BS and the AA hold the top spot for the Variable Rate ISA best buy, both offering the same market leading rate of 3.50%. But you’ll need to act fast for this tax year, as time is running out fast.
Here’s a rundown of what’s been happening this ISA season….
The war on ISAs looked like it was settling down, certainly until the new tax year, however up popped Cheshire Building Society at the last minute with yet another increase to its rate. The best buy Direct Cash ISA (issue 1) has been increased from 3.35% tax free to 3.50% tax free. And best of all, the increase is not only for new customers but also any existing customers who have already applied. The underlying rate, however, still remains the same at 1%, so the new bonus rate is 2.50% until 30 September 2013. Check out the full Variable Rate ISA tables for more details.
Principality Building Society was a little slow off the mark in launching a new issue of its e-ISA, issue 3. The account pays a competitive rate of 3.10% tax free which includes a bonus of 1.30% for the first 12 months. The minimum is just £1 and transfers in are accepted. The only downside is that it’s only available via the internet, but otherwise all looks pretty good.
Santander launched its 2 Year fixed rate Major ISA (cash ISA) paying 4% AER, with a 0.10% bonus if Rory McIlroy wins an eligible golf major! A marketing gimmick if ever we saw one, but a fun one all the same. It also added a market leading 1 year fixed rate Cash ISA to its range, paying 3.50% AER.
Along with the fixed rates ISAs, Santander also launched a variable rate cash ISA, Direct ISA Issue 9, which pays 3.30% AER. Direct ISA offers easy access for withdrawals but comes with a hefty 2.80% bonus for the first 12 months. The best bit of news however is that all of the Santander ISAs mentioned allow transfers in from previous ISA subscriptions.
Cheshire also launched a new fixed rate cash ISA, Direct Fixed Rate ISA issue 3, with a rate of 4.05% tax free (4.00% AER). The account is fixed for 18 months and is available on a minimum of £1,000 up to the maximum allowance of £5,340. But unlike Santander, this account (and the account mentioned above) doesn’t allow transfers in.
The AA launched its Internet Access ISA issue 3 (now Postal ISA) which pays a cracking rate of 3.50% but comes with a WHOPPING bonus of 3% for the first 12 months. The account is available on a minimum of £2,500, withdrawals are available without notice or penalty and it’s only available via the internet. Like Cheshire Building Society it doesn’t allow transfers in. This account changed from Internet Access ISA (issue 3) to the Postal Access ISA (issue 3) to stem the flow of applications. The account still pays the same rate however to apply you now need to call them on 0845 603 6302.
This account, like many best buys, is one of the reasons we set up SavingsChampion.co.uk. A bonus
es this big, forms such a large part of the interest rate earned that when it falls away, the interest you earn simply disappears. It’s essential that you keep a track of what interest rate you’re earning so don’t forget to add your accounts to your Rate Tracker portfolio and let us do the hard work for you!
For those of you who haven’t yet registered for our unique Rate Tracker service, we now have a dedicated ISA Tracker which allows you to find the best ISA rate and track your account, to ensure you’re always aware of what’s happening with your ISA savings rates. The ISA Tracker monitors all movements in ISA rates and informs you when rates change along with details of the best buys at that time.