Savings Rate Rundown - Flurry of improved Fixed Rate ISAs enter the best buy tables

25th August 2015

Flurry of improved Fixed Rate ISAs enter the best buy tables 

The last few weeks have seen a flurry of improved fixed rate cash ISA deals hit the market and various new entrants to our best buy tables.

August had already seen various market leading rates launched by the likes of Holmesdale Building Society and Leeds Building Society and there have been even more new best buys in the last week.

Tesco Bank (1.75% tax free/AER) joined a variety of providers at the top of the 1 year fixed rate ISA table and Principality Building Society entered the 2, 3 and 5 year tables. Earlier this week, Marsden Building Society launched a new best buy ISA paying up to 2.05% tax free/AER, fixed until October 2017. Contrary to the current trend in the savings market, even a high street provider, Halifax (1.60% tax free/AER for 1 year) improved its rate, making it more competitive and breaking into the top ten ISAs for the term as a result.

The latest change has come today with the launch of a new market leading 1 year fixed rate ISA from Julian Hodge Bank. Paying 1.80% tax free/AER, the provider has emerged from the leading pack to sit at the top of the table.

With all of these changes happening this month, savers may be wondering what is happening, particularly after such an underwhelming ISA season this year. Savers may be debating about whether to go ahead with a fixed rate or to wait and see what happens next. Certainly those who are yet to invest in a cash ISA this tax year, could be watching this space.

Rates News

Julian Hodge Bank has launched a new version of its 1 Year Fixed Rate Cash ISA paying 1.80% tax free/AER, an increase from the previous version, which paid 1.75%. Accounts can be opened by post with a minimum of £5,000 and transfers in from previous cash ISAs are accepted.

The latest move amongst best buy fixed rate ISAs and this is a market leading rate for the term. The previous version was sharing top spot with Tesco Bank, Holmesdale Building Society and Shawbrook Bank, so it is good to see a clear market leader. 

Tesco Bank has launched a new version of its 1 Year Fixed Rate Cash ISA paying 1.75% tax free/AER. The previous version was paying 1.50%. Accounts can be opened with a minimum of £1 and transfers in from previous cash ISAs are allowed. Funds can be accessed on closure or full transfer out only, subject to a charge of 90 days’ interest on the balance.

A large increase from this provider put it in line with the very best rates on the market for the term, until the above improved rate from Julian Hodge Bank was launched.

Principality Building Society has increased the rates on its fixed rate ISAs for new accounts opened. The 2 Year Fixed Rate Cash ISA Issue 141 is paying 2.00% tax free/AER (the previous version was paying 1.80%), the 3 Year Fixed Rate Cash ISA Issue 142 is paying 2.20% tax free/AER (the previous version was paying 2.00%) and the 5 Year Fixed Rate Cash ISA Issue 143 is paying 2.50% tax free/AER (the previous version was paying 2.40%). Accounts can be opened online, in branch or by post with a minimum of £500 and transfers in from previous cash ISAs are accepted. Funds can be accessed on closure or full transfer out, subject to a penalty of 180 days’ interest for the 2 year ISA, 270 days for the 3 year ISA or 360 days interest for the 5 year ISA.

Each of the fixed rate ISAs appear in the top five accounts for the respective terms, with the 2 year rate joint market leading.  Whilst there are better rates available elsewhere, it is good to see a rare appearance in the best buy tables from this provider.

Marsden Building Society has launched a new Fixed Rate Cash ISA paying 2.00% tax free/AER on balances above £5,000 and 2.05% tax free/AER on balances above £35,000, with the rate fixed until 31st October 2017. The previous version paid 1.70% and 1.80% respectively. Accounts can be opened in branch or by post and transfers in from previous cash ISAs are allowed. Funds may be accessed on closure or full transfer out only, subject to 270 days loss of interest.

The rate is in line with a whole host of other providers at the top of the best buy table for this term, but those looking to transfer in larger balances will receive an even better rate, topping anything else on the market at the moment for this term.

Halifax has launched a new version of its 1 Year Fixed Rate ISA paying 1.60% tax free/AER, an increase from the previous version, which was paying 1.40%. Accounts can be opened online, by telephone or in branch with a minimum of £500 and transfers in from previous cash ISAs are accepted. Funds can be accessed on closure or full transfer out only, subject to the loss of 90 days’ interest.

A significant increase in rate and although not enough to enter our best buy tables, it does make the top ten for the term. It is especially interesting to see a high street provider not only increasing a rate, but also making one of its accounts much more competitive, something that we have rarely seen in recent times.

Earl Shilton Building Society has re-launched its 90 Day Notice Cash ISA paying 1.55% tax free/AER. Accounts can be opened in branch or by post, with a minimum of £10 and transfers into the account from previous cash ISAs are accepted.

This is a competitive rate and is currently one of the highest paying variable rate ISAs on the market. It is good to see an improvement made in this category, which has been virtually ignored by providers, certainly since the limited moves made around the start of the 2015/16 tax year.

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