Savings update: the best Isa and taxable easy-access account rates
NatWest and RBS are offering among the best rates for savers able to put away the full £20,000 cash Isa allowance for this tax year before 5 May.
The banks will pay a 1 percentage point bonus for a year, worth an extra £200 in interest on balances up to £20,000.
The underlying rate with the easy-access NatWest Cash Isa is just 0.01% but the bonus boosts it to 1.01%. At RBS the standard rate is 0.05%, so you earn 1.05% including the bonus.
Coventry Building Society pays 1.05% on its Easy Access Isa Issue 5 with no bonus. Skipton Building Society has upped the rate on its Bonus Cash Isa to 1%, including a 0.35 percentage point bonus for a year. Unlike the Coventry and NatWest accounts, you cannot transfer your existing cash Isas into the Skipton deal.
On fixed-rate cash Isas, the top one year deal comes from Yorkshire Building Society at 1.1% fixed until the 30th April next year. Leeds Building Society pays 1.01% while Newcastle and Skipton Building societies along with Aldermore Bank pay 1%. For two years, the top rate is 1.25% from Yorkshire Building Society followed by 1.2% from Skipton Building Society and Aldermore Bank.
On taxable easy-access accounts Yorkshire Building Society pays a top 1.15% on its branch-based Single Access Saver. But you are restricted to making withdrawals on just one day of your choosing a year.
French-owned RCI Bank pays 1.1% on its internet-based Freedom Account with no withdrawal restrictions. Kent Reliance has upped the rate for new savers on its Easy Access account for new savers to 1% while Charter Savings Bank has launched its Easy Access 3 account at 1.01%.
This article was originally written for our sister magazine, Money Observer.
There are limits to how much you can invest in any tax year. For 2011/12, the limit is £10,680. Of that, the maximum you can invest in cash is £5,340 and the balance of £5,340 can be invested in shares (individual company shares or investment funds). If you don’t take the cash ISA allowance, you can invest up to £10,680 into a stocks and shares ISA.
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.