Savers will be pleased to find out that providers have stepped up competition in the ISA market, with rates rising and new deals being launched to entice savers since the start of 2019.

Indeed, the latest research from Moneyfacts.co.uk can reveal that 24* savings providers have increased rates or launched new ISAs, with some securing a Best Buy position in the process.

Rachel Springall, Finance Expert at Moneyfacts.co.uk, said:

“It’s encouraging that the ISA market is showing signs of life so early on in the year, with providers increasing rates and launching new deals, some of which now offer market-leading rates. In fact, 15 providers have upped rates and 10 providers have launched fresh deals since the start of 2019*.

“Savers may well be looking towards the short-term market for an ISA due to growing economic uncertainties. In the easy access ISA market, Shawbrook Bank, Tesco Bank and Yorkshire Building Society have upped their rates and feature in the top 10 best deals in the market, sitting just shy of the market leader Virgin Money.

“A stream of increases can also be seen in the fixed ISA market, with the one-year fixed sector seeing the most competition as Charter Savings Bank, Chelsea Building Society, Coventry Building Society, Cynergy Bank, Dudley Building Society and Yorkshire Building Society have all improved their rates and taken positions in the one-year fixed ISA Moneyfacts.co.uk Best Buys as a result.

“Despite this glowing positivity, it is worth noting that fixed rate bonds and easy access accounts outside of an ISA wrapper generally pay better returns, especially when considering the market leaders. The Personal Savings Allowance** that came into effect in April 2016 has had a negative impact on the appeal of ISAs, which is still felt today almost three years on. There are also more challenger banks outside of the ISA market too, as well as more activity generally in the fixed bond market.

“The best easy access rate outside of an ISA wrapper (based on a £10,000 investment) currently comes from ICICI Bank UK, paying 1.54% while the best one-year fixed bond comes from Al Rayan Bank, an Islamic bank, offering 2.15% gross as an expected profit rate. In real terms, many of the cash ISAs available on the market fail to outpace the impact of inflation. In fact, only three deals can beat 2.1%, the current level of inflation (CPI).

“Clearly, providers are sowing the seeds for savers to discover market-leading returns, and as the ISA season flourishes, it will hopefully lead to increased competition and even better deals as we move closer to the new tax year.”

*Providers that have increased ISA rates since the start of 2019: Aldermore, Charter Savings Bank, Chelsea Building Society, Coventry Building Society, Cynergy Bank, Dudley Building Society, Leeds Building Society, Leek United Building Society, M&S Bank, Sainsbury's Bank, Shawbrook Bank, Skipton Building Society, State Bank of India, Tesco Bank and Yorkshire Building Society. Providers that have launched new ISA’s since the start of 2019: Barclays Bank, Coventry Building Society, Loughborough Building Society, Marsden Building Society, Monmouthshire Building Society, Newcastle Building Society, Paragon Bank, Principality Building Society, Saffron Building Society and Teachers Building Society.

**Personal Savings Allowance: Basic rate taxpayers can earn up to £1,000 in savings income tax-free (or £500 for a higher-rate tax payer) since 6 April 2016.

moneyfacts.co.uk is a financial product price comparison site, launched in 2000, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, there is no commercial influence on the way moneyfacts.co.uk ranks products, showing consumers a true picture of the best products based on the criteria they select. The site also provides informative guides and covers the latest consumer finance news, as well as offering a weekly newsletter.

MoneyFacts Archive

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.