Savers spoilt for fixed rate ISA choice - Savings - News - Moneyfacts

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Savers spoilt for fixed rate ISA choice

Savers spoilt for fixed rate ISA choice

Category: Savings

Updated: 22/03/2011
First Published: 21/03/2011

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 It is now over 6 months old so the content may be out of date.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 searching for a fixed rate ISA have more than four times the amount of ISA deals to choose from than five years ago, Moneyfacts.co.uk has revealed.

The sharp rise in the number of fixed rate ISAs has resulted from heightened provider demand for savers' money, according to Moneyfacts.co.uk.

The number of fixed rate ISAs has increased by almost 50% over the past year, rising from 93 in March 2010 to 139 at present.

Product numbers have more than quadrupled over the past five years, while just 14 fixed rate ISA deals were available in March 2001.

"If savers have fully utilised their ISA allowance each year since launch, they could now have a tax-free savings pot of around £70,000," said Michelle Slade, spokesperson for Moneyfacts.co.uk.

"Providers are keen to not only attract such sizeable balances, but to also keep them, making fixed rate ISAs a target market."

Most fixed rate ISAs do not allow access to the invested money during the term of the deal.

This means that providers are certain as to the amount of time that they will have the money in their coffers.

"The reward for this lack of access means that fixed rate ISAs typically pay higher interest rates than variable rate ISAs," added Ms Slade.

"The highest rates are offered on longer term fixed rates, but most savers prefer to make shorter term commitments."

Savers looking to fix for longer periods are warned they need to consider that the rate may be far less competitive in a few years' time when bank base rate is almost certain to have risen from its current all-time low.

"If ISA savers want to ensure they benefit from base rate rises as they occur, then variable rate cash ISAs may be a more suitable option," concludes Ms Slade.

Halifax, NatWest, Northern Rock and Royal Bank of Scotland are just some of the famous names offering fixed rates ISAs at the moment.

Check out our fixed rate ISA best buy charts to find the deal that suits you.

Find the best savings account for you – View our fixed rate isa best buy landing page

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.

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