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

Isa-form-with-pound-coin

Savers need to be quick off the mark to grab the top deals on easy-access accounts.  Some, such as Charter Savings Bank Easy Access Issue 8 at 1.32 per cent, are on sale for just a few days before closing to new savers.  Other top deals to disappear include Paragon Bank Limited Edition Easy Access 4 at 1.31 per cent, along with Coventry Building Society Easy Access Isa 6 at 1.05 per cent; the latter’s rate is due to rise to 1.3 per cent on 1 December.

The top easy-access account, RCI Bank Freedom Savings, pays 1.3 per cent.  With this account you are covered up to €100,000 (around £88,000) by the French compensation scheme rather than our own Financial Services Compensation Scheme.  Birmingham Midshires also pays 1.3 per cent, but this rate is boosted by a bonus payable for the first 12 months, after which the rate drops to 0.05 per cent. 

Other good deals include Shawbrook Bank at 1.2 per cent and Ford Money at 1.17 per cent. 

On fixed rate bonds, the top one-year fixed-rate bond comes Atom Bank at 1.95 per cent on an account you run on your smart phone or tablet.  Charter Savings Bank’s internet-based one-year bond pays 1.81 per cent.  For two years, Atom Bank and Axis Bank pay the best rate of 2.05 per cent. 

On tax-free cash Isas, Shawbrook Bank easy-access deal pays 1.1 per cent and Sainsbury’s Bank 1.01 per cent, while from 1 December National Savings & Investments Direct Isa will pay 1 per cent. 

The best one-year Isa rate is 1.36 per cent from Charter Savings Bank or 1.35 per cent from Virgin Money and Leeds Building Society.  Yorkshire Building Society pays 1.4 per cent over a slightly longer term – to 28 February  2019.  For two years Charter Savings Bank pays 1.72 per cent and Virgin Money 1.55 per cent. 

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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