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Savers looking to deposit their funds into a short-term ISA will be pleased to see that Hampshire Trust Bank has increased the rates on two of its ISAs today, which are now offering chart-topping rates.
This increase in ISA rates means that Hampshire Trust Bank now offers the best rate overall in the two year fixed ISA chart and the best rate, without any opening restrictions, in the one year fixed ISA chart. Its 2 Year ISA Bond (Issue 4) offers 1.61% AER, which is 0.06% higher than the next best rate in the two year chart, while its 1 Year ISA Bond (Issue 5) pays 1.41% AER. Both these ISAs pay interest on their anniversaries and require just a £1 opening minimum deposit. They also allow transfers in and, unusually for fixed ISAs, permit earlier access, but these are subject to a 90 day interest loss penalty. Both can be opened online or by post and then managed online, by post and by phone.
While these ISA rate rises are good news for savers, the ISA market overall continues to struggle, and many terms have seen average rates fall. Just yesterday, we reported that average rates in the easy access ISA charts have fallen to 0.85% this month, which is the lowest it has been since August 2018. As well as this, average notice ISA rates have dropped to 1.12% and the average one-year fixed cash ISA rate has fallen to 1.15% this month. In fact, savers have to look to the longer-term fixed ISA chart for the only rates that have remained unchanged month-on-month, where the average rate remained at 1.37%.
Although the increase in short-term ISA rate by Hampshire Trust Bank could be the start of an uplift in ISA rates before the spring ISA season, the possibility of a Bank of England base rate cut following a fall in inflation figures during December 2019, could mean that there is a high possibility that savings rates remain low or are cut even further over the next few months.
Commenting on Hampshire Trust Bank’s increase in short-term ISA rates, Rachel Springall, finance expert at Moneyfacts.co.uk, said: “It’s great news to see some competition in the ISA market but as we have seen before, lucrative offers don’t always hang around for long. It’s important that savers take some time out to compare deals and apply with pace so they don’t miss out. Some savers may prefer to put their cash with a familiar brand, such as a high street bank, however, challenger banks can offer attractive rates and should not be overlooked.”
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