New tax year – new cash ISAs and other improvements made
Unsurprisingly with the start of the new tax year we have seen many new accounts launched in the cash ISA market, with a number of accounts being revamped with higher interest rates and added flexibility.
With the dawn of the tax year, we have also seen improved rates elsewhere in the market, which is good news for savers and gives us encouragement that the tides may have started to turn.
We have seen a burst of life in the variable rate cash ISA market, with improved rates from RBS and NatWest.
Amongst fixed rate ISAs, The Family Building Society entered the fray with its market-leading 1 year account.
Over in the fixed rate bond market, improvements came from both Secure Trust Bank and Ikano Bank. However most striking, is the long-awaited new 3 year bond launched by National Savings & Investments.
Away from the fixed rate markets, an increased rate from Britannia on its easy access account has pushed its way into our best buy tables. The new rate brings the provider in line with RCI Bank’s Freedom Savings Account, which nevertheless remains the highest-paying easy access account without a limit to the number of withdrawals allowed per year.
Elsewhere, we have seen a positive move from Tesco Bank who re-launched its Current Account, with its rate guarantee still in place.
In the variable rate cash ISA table, RBS ignited a challenge to the top spot with a new bonus on its Instant Access ISA, now paying 1.05% tax free/AER, whilst its sister brand, NatWest also launched a new bonus on its Cash ISA and is now paying 1.01% tax free/AER.
Both accounts can be opened online, in branch, via telephone or mobile banking and neither have a minimum initial deposit. However, it is essential to note that both accounts have a funding requirement attached. In order to receive the advertised rate, £20,000 must be deposited by the 5th of May 2017 and the bonus will only be paid on £20,000.
If the funding requirements and the large bonuses that make up the attractive interest rates are not appealing, other options can be found in our Variable Rate Cash ISA Best Buy Table.
Looking at the fixed rate ISAs; The Family Building Society tops the shorter term field with its 1 Year Fixed Rate Cash ISA (2) paying 1.15% tax free/AER, which can be opened online, by post or in branch, with a minimum of £1,000.
As transfers into this account are permitted, you are not limited to receiving this rate on this tax year's allowance alone, so this could be an option to consider for funds accumulated over the years.
Across to the fixed rate bonds, National Savings & Investments launched its new market-leading 3 year bond paying an impressive 2.20% gross/AER. Both the application and management of this account is via online channels, with a maximum deposit allowed of £3,000.
Ikano Bank has taken charge of the 5 year table, paying 2.35% gross/AER. It is essential to note that funds held with Ikano Bank are not covered under the UK FSCS, but under the Swedish equivalent and accounts can be both opened and managed online, with a minimum of £1,000.
Further to this, Secure Trust Bank have become a dominant force across the fixed rate bond market, now featuring in each of our best buy tables.
It is crucial to be aware that market-leading rates such as these do not tend to stay around for long, so it is important to act swiftly if you want to open these accounts.
Secure Trust Bank also leads the notice account best buy table with its 120 day notice account (issue 23) 1.34% gross/1.35% AER, which can be opened online and managed by post or telephone, with a minimum of £1,000.
Although offering a good rate of interest, this account does bring with it restrictions to the number of withdrawals allowed each year. It is unusual to have both a notice period and a restriction to the number of withdrawals and something to consider before going ahead.
With an improved rate on its Select Access Saver 7, Britannia now features in the easy access best buys. Previously paying 0.80% gross/AER, following the increase it is now paying 1.10% gross/AER. This account can be applied for in branch, over the telephone or online with a minimum of £500.
It is great to see such a significant improvement to the rate offered on this account, an increase of 0.30% gross/AER, pushing it near to the top of our Easy Access Best Buy Table.
However, it is worth noting that this account does come with a restriction on the frequency of withdrawals each year, so make sure that this suits you before proceeding.
Finally, Tesco Bank emerged back into the High Interest Current Account best buy table, having relaunched its Current Account paying 2.96% gross/3.00% AER on balances up to £3,000, with the rate guaranteed until the 1st of April 2019.
It’s encouraging to see the return of this account, which not only pays a good rate, but adds the comfort of knowing this will remain unchanged until 2019. Although, it is important to note that there are new criteria that must be met to receive this rate.
If you would like to discuss further options or would like any help with your savings, please get in touch. Our Bath-based savings experts would love to hear from you, so call us on 0800 321 3581.