Isa rates fall despite product choice rising – where can you find the best rates?

Isa rates fall despite product choice rising – where can you find the best rates?

UK savers lose out as Isa returns start to dwindle, find out who is offering the best account

Brean Horne
Tue, 03/17/2020 – 10:54

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Savers have faced a tough start to 2020 with Isa rates falling, despite the number of Isa accounts available rising, according to new findings from Moneyfacts.

The figures show that although there has been an increase in the choice of Isa deals available, rates on offer have plummeted.

Currently, the average easy access Isa interest rate stands at 0.83%, down 0.12% compared to last year’s rate of 0.95%.

Rates have also tumbled on the average longer-term fixed rate Isa. Savers today could get an average interest rate of 1.29% – 0.33% less than the same time last year of 1.62%.

The table below shows how average Isa rates have changed since March 2018.

Product Mar-20 Mar-19 Mar-18
Average easy access Isa 0.83% 0.95% 0.79%
Average one year fixed Isa 1.14% 1.37% 1.12%
Average longer-term fixed Isa* 1.48% 1.62% 1.29%

*Longer term fixed Isas are those with terms over 550 days (Moneyfacts Treasury Reports 2020)

Savings products across the board have seen rates drop. For example, the average longer-term fixed bond has fallen by 0.52% year on year and now stands at 1.37%.

The table below shows how average fixed bond rates have changed since March 2018.

Product Mar-20 Mar-19 Mar-18
Average one-year fixed bond 1.15% 1.47% 1.19%
Average longer term fixed bond* 1.37% 1.89% 1.68%

*Longer term fixed bonds are those with terms over 550 days. (Moneyfacts Treasury Reports 2020)

The Bank of England’s recent decision to cut the base rate from 0.75% to 0.25% to protect the UK economy from coronavirus disruption could spell further bad news for savers and push savings rates even lower.

Eleanor Williams, finance expert at Moneyfacts.co.uk, says: “Unfortunately, although savers have more products to choose from, average rates have fallen in the last 12 months.

“For those who are in the habit of opening an ISA each year, there are still some providers out there willing to top the rate tables.

“It is still the case that challenger banks tend to lead the way, and so it is important that savers pay attention to the more unfamiliar brands if they are looking for a new deal, and of course, be willing to move fast to catch a top rate before it’s closed.

“It is worrying to consider that this could well be the peak of the ISA season, as the recent unexpected base rate cut of 0.50% back to a historic low of 0.25% may be passed on to savers in the next couple of months.

“This is likely to be concerning to many who may feel disincentivised from saving, and worrying considering that saving regularly gives people a financial cushion in case of unexpected bills and stops them having to rely on expensive credit card and bank overdraft rates, which may shortly be increasing for some customers given the recent overdraft rules.”

Best cash Isa rates

The top easy access cash Isa is the Al Rayan Bank Instant Access Cash Isa which pays 1.36% expected profit rate (EPR). 

You can open this account online with a deposit of £50. 

If you have the capacity to lock your money away for longer, you can access higher rates of return. The Al Rayan fixed term deposit cash Isa pays 1.5% EPR. 

Savers will need a minimum deposit of £1,000 to open the account. 

Aldermore currently offers the top three year fixed rate cash Isa which pays 1.55% APR and requires a minimum deposit of £1,000. 

Check out our best cash Isa rates guide for a full round up of the top-performing accounts on the market. 

NB: The rates quotes were correct as of 17/03/2020 but may be subject to change. 

 

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Nationwide opens branches early for elderly and vulnerable

Nationwide opens branches early for elderly and vulnerable

The building society is trialling new branch opening times during the coronavirus outbreak

Stephen Little
Tue, 03/17/2020 – 10:49

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Nationwide is opening its branches an hour early to help the elderly and vulnerable during the coronavirus outbreak.

The Government is expected to shortly announce that those over 70 should self-isolate for up to three months. This would make it difficult for them to use banking services as they are typically located on busy high streets. Older people are also less likely to use internet banking.

Nationwide says branches will open from 8am, instead of the usual 9am, to support to people aged 70 or over and those with underlying health conditions.

It says that the trial will begin from 18 March at more than 100 branches across the UK.

Older and vulnerable customers will be able to use the facilities first, benefitting from enhanced cleaning that branches will undergo each evening, and before they open to the wider membership from their usual opening times.

If the trial is successful and there is a need, Nationwide will consider extending to more branches across its 650-network.

Mandy Beech, Nationwide’s branch network director, says: “We understand the current situation is likely to hit the elderly and vulnerable the hardest, not only because of the higher risk of catching coronavirus, but also through potentially feeling isolated from the wider world should this issue continue for a longer period.

“That is why we are trialling a specific opening time for our older and most vulnerable members. We know that, in many instances, these are the people who most value and benefit from face-to-face service when they manage their money. In some cases, it may also be one of the only interactions they have each day.

“We also know that many older people rely on public transport. As such we would ask local authorities and Government to consider whether they could temporarily enable use of free bus passes for older people before 9.30am, in addition to relaxing parking rules in local high streets at the start of the day.”

Royal Bank of Scotland has said it will defer mortgage and loan payments for up to three months for those affected by the coronavirus.

TSB is also giving customers repayment holidays for up to two months.

Both RBS and TSB will waive early closure charges on fixed-rate bank accounts to allow customers to access their cash if they face financial difficulty due to coronavirus.

Customers affected by the coronavirus will be able to get refunds on credit card cash advance fees. They will also be able to increase credit card cash withdrawals on their credit cards up to £500 and temporarily increase their credit card limit.

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