Savings update: Virgin new issue puts it amongst market leading rates
The rate is amongst the leaders but you can only make three withdrawals a year. If you make more, then your rate drops to 0.5% on the tax-free cash Isa and 0.25% before tax on the easy-access ordinary savings account.
The top easy-access accounts online are Leeds Building Society's Limited Issue Online Saver, Tesco Bank Internet Saver and French-owned RCI Bank all at 1%. The Tesco rate is boosted by a bonus paid for the first year, after which your rate tumbles to 0.4%.
On easy-access cash Isas the top rate comes from Coventry Building Society at 1.1% followed by National Savings & Investments Direct Isa at 1%. But you can't transfer your existing cash Isas into these accounts.
Other top deals
The top deals for transfers is the new Virgin Money Defined Access Isa, available online, through its branches or by post, at 0.95%.
With Atom you have to run your account on your phone through its app while with French-owned RCI Bank your money is covered by the European compensation scheme rather than the UK Financial Services Compensation Scheme. The European scheme gives you €100,000 (around £84,000) worth of cover.
This story was originally written for our sister magazine, Money Observer.
Invidivual Savings Accounts were introduced on 6 April 1999 to replace personal equity plans (PEPs) and tax-exempt special savings accounts (TESSAs) with one plan that covered both stockmarket and savings products, the returns from which are tax-exempt. The ISA is not in itself an investment product. Rather, it’s a tax-free “wrapper” in which you place investments and savings up to a specified annual allowance where the returns (capital growth, dividends, interest) are tax-exempt (you don’t have to declare ISAs and their contents on your tax return). However, any dividends are taxed within the investment, and that can’t be reclaimed.
This is a mutual organisation owned by its members and not by shareholders. These societies offer a range of financial services but have historically concentrated on taking deposits from savers and lending the money to borrowers as mortgages, hence the name. In the mid-1990s many societies “demutualised” and became banks. One academic study (Heffernan, 2003) found demutualised societies’ pricing on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. In 1900, there were 2,286 building societies in the UK; in 2011, there are just 51.