ISA shame about the ISA rates
We all know that deposit rates are particularly rubbish at the moment. Although ISAs can offer a better deal, being tax free so you earn an extra 20% (or more) gross interest, this year’s rates have been pretty dire, even around March/April when cash ISA providers are jostling for a share of the savings cash.
Now it seems, even the end of the tax year boost has worn off, with some of the top rates being slashed. Last month the Cheshire was offering a market-leading 2.30%, and Nationwide 2.25%. Today those rates stand at 1.70% and 2% (including a 1.50% bonus). Virgin Money’s 2.15% has also shrunk down to 1.75%. With the latest (lower) CPI figures at 2.70%, even tax-free, you’re not getting much of a return, which is why many people are turning to alternative investment streams to try and protect their cash. Or at least, those who have any spare cash.
While those who have already invested for this tax year might be OK, if their rate was guaranteed, it does show that ISA investors need to keep an eye on the rates available, and where possible, consider transferring between providers.
The current best rates for new ISA investment, according to Moneyfacts, are now National Savings (NSI) at 2.25% and Chorley Building Society at 2.20%, although neither accept transfers in. Aldermore are offering 2.10% on balance transfers, with a 60 day notice period. As ever, if you do want to transfer an ISA, never just withdraw the money as that will cause your cash to lose it’s ISA status and you will be left with only the current year’s allowance. Instead, ask your provider for a transfer form- they are required to effect the transfer for you in a timely and efficient manner, but do work out whether there would also be any notice/early withdrawal penalties to consider.