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Top 5 inflation-beating cash ISAs

Top 5 inflation-beating cash ISAs

Category: Savings

Updated: 20/03/2013
First Published: 19/03/2013

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 It is now over 6 months old so the content may be out of date.

The Consumer Prices Index rose during February, from 2.7% to 2.8%, figures from the Office for National Statistics reveal.

This means that a basic rate taxpayer will now need to find a savings account paying at least 3.50% per annum to negate the effects of tax and inflation. A higher rate taxpayer, meanwhile, will have to find an account paying at least 4.66%.

Currently there are only five savings accounts that negate the effects of tax and inflation – all of them cash ISAs.

"Savers' torment has been heightened today with the news that inflation has risen once again and spending power has fallen," said editor at Moneyfacts.co.uk, Sylvia Waycot. "Even the darling of the savings market, the cash ISA, struggles to lend a hand with only five out of 253 ISAs matching or beating inflation."

Here are the top 5 inflation-beating ISAs:

Halifax
Halifax
ISA Saver Fixed - 5 Year Bond

3.10%AER/Gross
  • Minimum investment £500
  • Transfers in accepted
  • Apply online, by telephone or in branch
  • Interest paid on anniversary
  • Transfers out or early access will lose 365 days' interest

Penny saysPenny says…
Penny says: "Halifax's 5 Year Bond leads the pack in offering the highest rate for savers looking for an inflation-beating account.

"Transfers in are accepted, but savers must be ready to commit their investment to the full five year term as early access will incur a hefty penalty of 365 days' loss of interest."


Halifax
ISA Saver Fixed - 4 Year Bond

3.05% AER/Gross
    • Minimum investment £500
    • Transfers in accepted
    • Apply online, by telephone or in branch
    • Interest paid on anniversary
    • Transfers out or early access will lose 320 days' interest

Penny saysPenny says…
"Penny says: "Halifax's 4 Year Bond pays an impressive 3.05% to those able to commit funds for four years.

"Transfers in are accepted, but savers must bear in mind that early access will cost them 320 days' interest.""


Halifax
Halifax ISA Saver Fixed - 3 Year Bond

3.00% AER/Gross
  • Minimum investment £500
  • Transfers in accepted
  • Apply online, by telephone or in branch
  • Interest paid on anniversary
  • Transfers out or early access will lose 270 days' interest

Penny saysPenny says…
"Penny says: "This medium term cash ISA pays a market-leading rate of 3.00% on a minimum deposit of £500.

"Savers must remember that early access will incur a penalty of 270 days' loss of interest."


Santander
Major ISA 2 Year Fixed Rate


2.80%AER/Gross
  • Minimum investment £1
  • Transfers in accepted
  • Apply online, by telephone or in branch
  • Interest paid yearly
  • Includes one-off 0.10% bonus if Rory McIlroy wins an eligible golf "Major"
  • Earlier access on closure only on 120 day loss of interest and loss of bonus

Penny saysPenny says…
"Penny says: "Santander's Major ISA offers a great rate for those savers not willing to commit to a longer term.

"As an added bonus, if Rory McIIroy wins an eligible Major golf tournament, 0.10% will be added to the rate.""


Coventry Building Society
60 Day Notice ISA (3)

2.80% AER/Gross
  • Minimum investment £1
  • Apply online, by post, by telephone or in branch
  • Transfers in not allowed
  • Rate includes 0.60% bonus for 12 months
  • AER guaranteed to be at least equal to 2.80% until 31/12/2013

Penny saysPenny says…
"Coventry BS's 60 Day Notice ISA (3) offers a rewarding rate of 2.80%. Savers must remember they will have to give 60 days' notice before accessing funds.

"As this ISA includes a 0.60% bonus for 12 months, savers must ensure that they review the account's competitiveness in a year's time."

Information & Rates correct as at: 19/03/2013

What next?

Find all the best cash ISAs with Moneyfacts.co.uk Savings search
Download your free guide to ISAs
Fixed rate cash ISAs

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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