Rise reported for top fixed-rate cash ISAs
by Alexander Beard, on Sep 5, 2017 10:41:01 AM
Charter is also offering 1.41% on its new two-year ISA, pushing slightly ahead of that provided by UBL, which pays 1.36%. However, anyone wanting to withdraw from the ISA before the end of the term will lose 180 days’ worth of interest. The new two-year ISAs are considerably more attractive than those on offer in December last year, with Leeds Building Society and Aldermore Bank both providing ISAs which earned savers just 1.15%.
The interest rate increases again with Charter’s new three-year ISA, which pays 1.5% – 20% higher than at the end of 2016, and a little more than the 1.44% on offer with UBL’s ISA. 210 days of interest have to be sacrificed in order to gain early access.
Five-year ISAs have seen the most improvement, with Charter’s account offering 2.15% over the full term. Virgin Money’s five-year ISA pays 1.51%. Savers with Virgin Money would earn £172.50 over one year based on £15,000 savings, whilst Charter customers would be paid £322.50, a considerable 42% higher. Again, early withdrawals are permitted but 270 days of interest will be charged.
Whilst these ISAs are currently offering top rates, fixed-rate savings bonds offer a potential alternative for those who want to earn as much as possible from their savings. The top one-year bond comes from Shawbrook Bank and offers a 1.9% rate, with their two-year bond tied with those from United Trust Bank and Paragon Bank as the best on the market, all offering 2.05%. Three-year bonds from Access Savings Bank and NS&I offer 2.2%, whilst Vanquis Bank leads the way with its four and five-year bonds, which pay 2.2% and 2.5% respectively.
Whether you go for the higher rates of the bonds or the lower ISA rates will depend on your own circumstances. Those with higher income or a greater amount saved may want to opt for an ISA to protect their savings from taxation if they’re likely to go over the personal savings allowance threshold.