Average Cash ISA Savings Interest Rate at 2 Year High
/ ISA's Feb 09, 2011 - 07:15 AM GMTBy: MoneyFacts
The average ISA rate has risen to 2.27%, the highest rate since January 2009, bringing welcome relief to struggling savers.
|
Average ISA rate (including Fixed Rate ISAs) |
Average No Notice rate |
Today |
2.27% |
0.84% |
January 2010 |
2.05% |
0.78% |
January 2009 |
2.58% |
1.48% |
Source: Moneyfacts.co.uk - 9.2.2011 |
||
A number of providers have started to unveil their latest tax-free savings products, anticipating the dawn of the new ISA season, which traditionally starts in early April.
Top 5 Cash ISAs |
||
Provider |
Account name |
Rate |
Nationwide Building Society |
e-ISA |
2.90% including 1.15% bonus until 31.7.12 |
krbs |
2012 Bonus Cash ISA |
2.87% including 2.12% bonus until 30.6.12 |
Santander |
Flexible ISA Issue 3 |
2.85% including 2.35% bonus for 12 months |
Halifax |
Cash ISA Direct Reward |
2.80% including 2.30% bonus for 12 months |
Northern Rock |
ISA Saver |
2.80% including 1.50% bonus for 12 months |
Source: Moneyfacts.co.uk - 9.2.2011 |
||
Louise Holmes, spokesperson for Moneyfacts.co.uk, commented:
“The Bank of England base rate has remained at an all time low of 0.5% for almost two years, although there have been recent talks of an imminent increase. An increasing number of providers are turning to in-house funding as a means of attracting higher deposits.”
“To achieve the same return as a Cash ISA paying 2.90%, a basic rate taxpayer will need to find a standard variable account paying at least 3.63%. Higher rate taxpayers need to achieve a return of 4.83%. At present, the highest variable no notice rate pays 2.90%, the same as the leading cash ISA but without the advantages of tax-free interest. This leaves investors at a loss when looking for a competitive short-term return.”
“Cash ISAs are a great option for investors. Aside from not having to pay income tax on their interest, savers can choose from a range of competitive easy access, notice and fixed rate deals. The maximum Cash ISA allowance for the 2011/12 tax year will increase by £240 to £5,340, which should further increase the appeal of this popular method of saving.”
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