Cash ISA rates soar to two year high - Savings - News - Moneyfacts


Cash ISA rates soar to two year high

Cash ISA rates soar to two year high

Category: Savings

Updated: 09/02/2011
First Published: 09/02/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Savers have been given a massive boost after the rates available on cash ISA accounts climbed to their highest level for two years.

The latest research from found that the average cash ISA rate has risen to 2.27%, the highest rate since January 2009.

A number of banks and building societies have started to unveil their latest cash ISA products in anticipation of the new ISA season.

This is the period when savers rush to make use of their allowance for the present tax year and then make their contributions for the next.

Those wanting to use their 2010/11 allowance have until 5 April to make their contributions, which can be up to £10,200 in an ISA overall, with a maximum of £5,100 in a cash ISA.

The 2011/12 tax year begins on 6 April, at which point the contribution limits will rise to £10,680 overall, and £5,340 in a cash ISA.

To achieve the same return as the top paying cash ISA at present - Nationwide's e-ISA with a rate of 2.90% - says a basic rate taxpayer will need to find a standard variable account paying at least 3.63% and a higher rate taxpayer would 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," said Louise Holmes, spokesperson for

"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."

Looking for a cash isa - Compare cash isa rates and best isa rates for transfers

Request a FREE ISA Savings brochure now

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Savings rates plummet to fresh lows yet again

It’s becoming a recurring theme, and unfortunately, it’s showing no signs of stopping. Savings rates have plummeted to fresh lows once again as the impact of the base rate cut continues – and this month, product availability has followed.

Less than half of savings accounts beat inflation

Official figures show that inflation jumped up during September, with CPI rising to 1%. Not only does this mean that consumers may begin to feel the impact on their wallets, but there are now far fewer savings accounts that will beat inflation.

Number of savings accounts falls to record low

As if the continued drop in savings rates wasn’t bad enough, our latest research reveals another blow to already hard-pressed savers, with the number of accounts available having fallen to a record low.