Derin Clark

Derin Clark

Online Reporter
Published: 12/06/2019

Unusual activity within the ISA market has seen new easy access ISA rates being introduced that are not only topping the chart with the same rates as during ISA season, but also offering the same top rate as non-ISA easy access accounts, analysis by Moneyfacts.co.uk shows.

Last month saw a rise in easy access ISA rates, with both Coventry Building Society and Virgin Money increasing their rates to 1.50% variable, currently the top rate available for an easy access ISA without any opening restrictions, with both ISAs allowing transfers in from cash and stocks & shares ISAs. These rates bring easy access ISAs back to the same levels that were seen during peak ISA season when Santander topped the chart with its 123 eISA (Issue 5) offering a rate of 1.50%, that was later reduced on 16 April.

Competition within the fixed rate ISA market has also remained strong, with the top rate available at 2.35% variable launched by United Trust Bank on a seven-year fixed rate ISA at the end of May. Meanwhile, there has been less activity at the top of the one-year fixed rate ISA market, with the top rate currently at 1.68%, which is being offered by Principality Building Society on an 18-month fixed rate ISA and has remained unchanged since early April. 

Easy access ISAs vs savings accounts

What is also interesting to note is that on accounts without any opening restrictions, the top rates on easy access ISAs are the same as being offered by easy access saving accounts, whereas normally ISA rates would be at a lower rate. For savers looking for an easy access option, choosing an ISA could be more beneficial due to the tax-free status of an ISA; with an easy access savings account, savers have to be aware of their Personal Savings Allowance of £1,000 in earned interest for basic rate taxpayers, or else they may need to pay tax on their savings – more information about this is available in the guide on how savings are taxed.

Why now is a good time to transfer your ISA

Rachel Springall, finance expert at Moneyfacts.co.uk, said: “ISA season generally peaks towards the end of March and early April, which means many savers may feel that they have missed out on the best returns if they have yet to invest. This isn’t entirely true though, as since May, new customers can get a top rate of 1.50% on an easy access cash ISA with Coventry Building Society or Virgin Money. Both brands upped their rates last month, and Virgin Money now pays the same rate on its non-ISA easy account, which is not common for a provider to do.”

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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