Switch for better rates, ISA savers told

Category: Savings
Date: 2/25/2010

Savers have been told they should be looking to switch to a better ISA rate, as the vast majority of accounts currently accept transfers in.

Figures from Moneyfacts.co.uk show that almost 92 per cent of cash ISAs on the market currently have a facility that allows savers to switch their funds to the account.

Over the past year, the number of cash ISA accepting transfers in has grown from 183 to 272 – an increase of almost 50 per cent.

The accounts were designed to be portable, allowing customers to switch their money to take advantage of the most competitive rates.

"There is no excuse for customers to languish on a low paying rate," commented Darren Cook, spokesperson for Moneyfacts.co.uk.

"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 ISA, as this could wipe out any potential gain."

The eleventh ISA season is currently underway, with a number of providers launching competitive new issues.

Savers that have utilised their full allowance since the inception of the ISAs and also invested in a TESASA will have amassed a savings pot of £43,200 plus interest.

Figures also show that in the time since the base rate of interest was cut to 0.50 per cent, the average variable ISA rate has fallen from 1.85 per cent to 1.38 per cent.

By contrast, average fixed rates have risen from 2.81 per cent to 3.24 per cent

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