New £20,000 Isa allowance – where to find the best savings rates

Isa-form-with-pound-coin

Rates are still in a state of flux following this month’s 0.25 percentage point rise in Bank of England base rate to 0.5 per cent.

Some providers have revealed new rates and it has become clear that not all – including Santander, Halifax Barclays and Lloyds – will pass on the full rate rise to all their savers.

On easy-access accounts Coventry Building Society has announced it will pay 1.1 per cent on its Easy Saver from next month. Tesco Bank will pay 1.35 per cent, including a bonus for the first year.

Paragon Bank is already paying 1.31 per cent on Limited Edition Easy Access 4, launched last Friday. 

The top one-year fixed-rate bond comes from Atom Bank at 1.95 per cent on an account you run on your smartphone or tablet. Internet-bank Paragon Bank pays 1.86 per cent , while in the high street Kent Reliance pays 1.6 per cent and Skipton Building Society 1.4 per cent.  For two years both Axis Bank and Atom Bank pay a top 2.05 per cent

On tax-free cash Isas, the best easy-access rate comes Coventry Building Society which will raise its rate to 1.3 per cent from the start of next month. Sainsbury’s Bank, which has not yet announced any increase, pays 1.06 per cent.

The the best rate one-year deal is 1.35 per cent from Leeds Building Society or 1.3 per cent from Skipton Building Society. Charter Savings Bank at 1.71 per cent pays the best two-year rate. 

How to beat inflation

To beat inflation, currently running at 3 per cent, compromises need to be made as all of the small number of regular savings accounts that pay more than inflation require savers to have a current account with the provider. Our sister publication Moneywise regularly keeps tabs on the savings market and has found there are six accounts that currently beat inflation.

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