Savers benefit as cash ISA competition hots up - Savings - News - Moneyfacts

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Savers benefit as cash ISA competition hots up

Savers benefit as cash ISA competition hots up

Category: Savings

Updated: 15/03/2012
First Published: 09/03/2011

MONEYFACTS ARCHIVE
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 It is now over 6 months old so the content may be out of date.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 looking to use their cash ISA allowance are set to benefit from the battle that has broken out between all the banks and building societies for their money.

New research from Moneyfacts.co.uk has revealed the competition is hotting up between providers keen to secure their share of the ISA season spoils.

The new figures show there has been a surge in the number of new cash ISAs that have been launched by providers over recent weeks, all hoping to catch the eye of the discerning saver.

At present, 39 cash ISAs which include an introductory bonus are available to savers.

This compares with the total of 27 which were on offer at the same point last year, and 21 which were available in March 2009.

Meanwhile, the number of cash ISAs accepting transfers in is also higher than in previous years.

A total of 308 cash ISAs permit transfers in at present, compared with 262 in March last year, and 195 in March 2009.

At the same time, the average ISA rate on offer has reached a two year high of 2.47%.

Louise Holmes, spokesperson for moneyfacts.co.uk, said some positive changes have been made in the ISA market of late.

"The maximum cash ISA allowance for the 2011/12 tax year will increase by £240 to £5,340 and providers now have to adhere to a 15 day deadline when transferring customers' funds," she added.

"Savers who are struggling with low returns at the moment would be very wise to invest in an ISA in order to make the most of their money."

However, Ms Holmes had a word of warning for those cash ISA savers who decide to opt for an account with an introductory bonus attached.

"On average, an introductory bonus accounts for around 56% of a cash ISA's overall rate at present.

"Savers must bear in mind that once the bonus period expires, the original rate will drop to a much lower figure."

If you haven't already used this year's ISA allowance, a cash ISA could be the sensible option.

Santander, Nationwide, Halifax, Barclays, NatWest and Northern Rock are just some of the household names that have some cracking cash ISA deals available.

What next

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Download our free Beginner's Guide to ISAs to find out how to use your 2011/12 ISA allowance. You will need a PDF reader such as Adobe Reader to download this guide.

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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