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Time to ditch your big bank Isa and get a better deal before your rate drops to as little as 0.2%


Time to ditch your big bank Isa and get a better deal before your rate drops to as little as 0.2%

  • Top rates are as high as 1.46% – an annual difference of £252 in interest
  • Santander and NatWest both pay as little as 0.2%, while Lloyds pays 0.35%
  • You can move cash Isa savings built up in previous tax years between providers without penalty, so there’s no reason not to switch to a higher rate

Savers with big High Street banks should transfer their Isa cash now to get a better deal.

If you opened an Isa with a major bank in previous tax years it is likely that your rate has now dropped to as little as 0.2 per cent. 

Even if it hasn’t, you could still earn more elsewhere, with top rates as high as 1.46 per cent.

If you opened an Isa with a major bank in previous tax years it is likely that your rate has now dropped to as little as 0.2 per cent

If you opened an Isa with a major bank in previous tax years it is likely that your rate has now dropped to as little as 0.2 per cent

This is a difference of £252 interest annually if you put in the full £20,000 Isa allowance.

So if you rushed to open a cash Isa with your current account provider before the tax year ended, you should now consider switching to a better-paying account.

Savers in Halifax Isa Saver Variable currently earn 0.6 per cent. But once you have been in the account for 12 months the bank moves your money into its Instant Isa Saver paying a miserly 0.2 per cent. 

Santander Easy Isa and NatWest Cash Isa both pay as little as 0.2 per cent and Lloyds Cash Isa Saver 0.35 per cent.

Barclays Instant Cash Isa savers fare little better with 0.7 per cent at best, while the HSBC Loyalty cash Isa pays between 0.55 per cent and 0.85 per cent.

Under taxman rules, you can move cash Isa savings built up in previous tax years between providers without penalty. You can split them between as many as you want, and between fixed-rate and easy-access accounts.

To switch, you just need to pick a new deal and ask the bank or building society offering it to make the transfer. Do not withdraw the cash yourself as you will only be allowed to reinvest a maximum £20,000 in this tax year.

It is up to each bank and building society as to whether they accept transfers.

Unfortunately, many of the best deals often don’t, such as Market Harborough BS Easy Access Isa at 1.25 per cent. National Savings & Investments Direct Isa at 0.9 per cent also won’t accept transfers.

If your fixed-rate cash Isa is coming to an end, be careful not to transfer it before the end of the term. It could mean you are hit with a hefty penalty.

Top easy-access deals that do accept transfers include Kent Reliance Easy Access Isa at 1.46 per cent. 

Online, Paragon Bank Limited Edition Easy Access Isa pays 1.45 per cent, Coventry BS Easy Access (Online) 2 pays 1.45 per cent and Leeds BS Limited Edition Online Access 11 pays 1.46 per cent.

Both Coventry and Leeds rates include a bonus rate for the first year — so you might have to switch again next year.

In the High Street, Yorkshire BS pays 1.46 per cent and Nationwide up to 1.4 per cent, but both restrict the withdrawals to as little as one a year. 

Leeds Double Access Isa allows two annually and pays 1.3 per cent. Skipton Cash Isa Tracker pays up to 1.36 per cent with limited withdrawals.

High Street deals with no bonuses or withdrawal restrictions include Virgin Money at 1.16 per cent and Coventry BS at 1.15 per cent.

Your switch should be completed within 15 working days.

sy.morris@dailymail.co.uk

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