The start of a new month has signaled a hive of activity in the savings market, with providers large and small launching new products to attract saver's money.
As in previous weeks the bulk of the activity is made up by fixed rate products as the providers look to lock savers money in, but we are seeing a steady increase in changes to fixed rate cash ISA products.
In his Budget speech in April, the Chancellor, Alistair Darling announced an increase in the annual cash ISA limit from £3,600 to £5,100. With the increase taking effect in a month's time (6 October) for the over 50s, providers are jostling for position to take advantage of the likely surge in additional investments into ISAs.
Those savers under 50 years of age will be able to take advantage of the increased ISA limit from the start of the next tax year in April 2010.
Many over 50s rely on the interest from their savings to supplement their income and they will welcome the increase in the amount of money they can save tax free. However, interest on an additional £1,500 in this low interest rate environment is likely to be negligible.
Chelsea tempts ISA savers
Chelsea Building Society has just launched new issues of its Fixed Rate Cash ISAs paying increased rates. Savers will receive a rate of between 3.20pc and 4.00% for a commitment of between one and five years. Savers can invest between £3,600 and £43,200 into the accounts, which accept transfers in, with further additions permitted after the October deadline. Access to funds is available during the term, subject to 180 days' loss of interest.
Kerri Morgan, Chelsea's Product Marketing Manager commented: "In the current market we understand that customers find fixed interest an attractive option, and we're delighted to be able to offer this addition to our ISA range." Top rates from Santander
Top rates from Santander
From 7 September Abbey and Bradford & Bingley are launching a market leading Two Year Fixed Rate ISA paying 3.50pc. Savers can invest between £1 and £3,600 into the ISA, with the over 50s permitted to top up to the increased £5,100 limit between 6 October and 17 November. The account is opened in branch and operated by post, but access is not permitted during the term of the deal.
New ISA from Saffron
Saffron Building Society has just launched its Three Year Fixed Rate ISA paying 4.40pc. The account accepts transfers in and savers can currently invest between £15,000 and £43,200, with the maximum limit increased to accommodate the additional £1,500 for the over 50s from October. Savers can access funds during the term, but will be subject to 365 days' loss of interest.
John Eastgate, Sales and Marketing Director at Saffron Building Society commented: "With interest rates stabilising at an unprecedented low, we recognise that diligent savers are not enjoying the returns that they may have hoped for. This 4.40% Three Year Fixed Rate ISA is designed to benefit those who have been adding to their ISAs year-on-year and are now looking for a better rate."
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.
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