21 Nov 2024

No excuse to languish on a low ISA rate

The ISA season is now in full swing and there is growing competition amongst providers to secure that top Cash ISA rate.

Customers who have made full use of their allowances since the ISA’s inception and also invested in a TESSA will have amassed a savings pot of £43,200 plus interest.

ISAs were designed to be portable and allow customers to transfer funds from one provider to another, if they were not happy with their existing one.

Over the past year, the number of cash ISAs accepting transfers in has grown from 183 to 272, an increase of almost 50%.

Even though bank base rate has remained at 0.50% for almost a year, the average variable ISA rate has fallen from 1.85% to 1.38%, but the average fixed rate ISAs has risen from 2.81% to 3.24%.

Darren Cook, spokesperson for Moneyfacts.co.uk commented:

“With almost 92% of all cash ISAs currently on the market accepting transfers in, there is no excuse for customers to languish on a low paying rate.

“As with the current overall savings market, providers are prepared to pay a premium for a longer term commitment in fixed rates, but remember that rates may look a little different in two or three years’ time.

“A fixed rate ISA has become the providers’ preferred growth area, with the number of available fixed rate ISA deals doubling from 41 a year ago to 84 today. Variable rate deals have only risen from 146 to 155 over the same period.

“It is important to check with your existing provider to make sure that there are no interest penalties to be paid before you transfer your cash ISA, as this could wipe out any potential gains.”

Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.

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