Whilst the last few weeks have not seen the volume of new cash ISA launches that we would expect to see at the end of one tax year and the beginning of the next, there have been a few key changes that will be of interest to savers.
New best buy ISAs were pretty thin on the ground in the lead up to the new tax year, with Skipton Building Society one of the only providers to make a positive move, releasing an easy access ISA that is in line with the current market leader, Coventry Building Society.
As the 2016/17 tax year dawned, we saw several new entrants appear in our best buy tables, with Aldermore re-entering the market after temporarily withdrawing its ISAs for the end of the last tax year. Principality Building Society and Nationwide Building Society launched new 3 year and 5 year fixed rate ISAs respectively, both of which now appear in the top five ISAs for the terms. Bank of Cyprus has made improvements to its 2 and 3 year fixed rate ISAs, which sees them both enter the best buy tables.
We have also seen a couple of new entrants to the Help to Buy ISA market, Penrith Building Society and Tipton & Coseley Building Society. Both accounts now appear in our Help to Buy ISA Best Buy Table, with the account from Penrith Building Society matching the current market leaders, Halifax and Santander.
Finally, NatWest has launched an interesting new account, featuring easy access withdrawals along with some fairly restrictive conditions.
Skipton Building Society has launched a new variable rate cash ISA, the Bonus Cash ISA Issue 5, paying 1.40% tax free/AER. The interest rate includes a 0.40% bonus for the first 12 months and there are no withdrawal restrictions. The account can be opened with a minimum of £1 and you can choose from an online version, which is opened and managed online or a branch version which you open and manage in branch or by post. Transfers in from previous ISAs are not allowed for the first 12 months.
With few new best buy variable ISAs launched at the end of the 2015/16 tax year, Skipton Building Society should be commended for bucking the trend. The account is one of the highest paying easy access cash ISAs on the market at the moment, in line with Coventry Building Society (also paying 1.40%), although the introductory bonus will mean that you need to review the account after a year. You are also unable to transfer previous ISAs into the account in the first year, so those looking to transfer in will have to look elsewhere.
Bank of Cyprus has increased the rate on two of its Fixed Rate Cash ISAs, pushing them into the top five rates for the respective terms. The new 2 Year Fixed Rate Cash ISA is paying 1.70% tax free/AER (the previous version was paying 1.65%) and the 3 Year Fixed Rate Cash ISA is paying 1.85% tax free/AER (the previous version was paying 1.75%). Accounts can be opened with a minimum of £500, online, in branch, by post or by telephone and transfers in of previous ISAs are accepted.
This is a welcome increase to this provider’s fixed rate cash ISAs for the new tax year, resulting in both going straight into the best buy tables for the respective terms.
Penrith Building Society has launched a new Help to Buy ISA paying a market leading rate of 4.00% tax free/AER. Accounts can be opened with a minimum of £1 in branch or by post.
Tipton & Coseley has launched a Help to Buy ISA paying 3.00% tax free/AER. Accounts can be opened with a minimum of £10 in branch or by post.
It is great to see new competitive rates launched by building societies in the Help to Buy ISA market, with the account from Penrith Building Society in particular giving the big names a run for their money.
NatWest has launched a new easy access account, the Savings Builder Account paying up to 1.50% gross/AER. The account pays 1.50% gross/AER on balances up to £5,000, 1.00% gross/AER on balances up to £10,000 and 0.20% on balances over £10,000. Interest is paid on a stepped basis, so you will earn a different rate on each portion of the balance within the above tiers. The balance in the account needs to grow by at least £100 per month or the interest rates will drop to 0.10% gross/AER for that month.
On the face of it, this is a good rate for easy access to your funds, but you have to be careful not to put more than £5,000 in the account, as any balance above this will earn a much less competitive interest rate. And you will need to add to the account on a monthly basis or you will receive a paltry 0.10% for those months.