NS&I has cut the rate on its popular Direct Isa: Where can you move your cash for a better tax-free deal?
- Direct Isa rate has fallen to 0.75% from 1% – despite base rate rise
- Cash Isa rates have not benefited from competition driven by challengers
- We reveal where you can switch to obtain a better tax-free deal
National Savings and Investments has cut the rate on its popular Direct Isa to 0.75 per cent, despite a base rate rise last month.
Tax-free savers have had a rough deal in recent years. Variable deals, for example, have seen competition moving rates higher – but that hasn’t been the case with cash Isas, with many challengers shunning them.
We think an Isa is still worth having. This is despite the tax-free personal savings interest allowance of £1,000 a year for basic rate taxpayers and £500 for higher rate taxpayers making them appear not as worthwhile as they once were.
Isa blow: The NS&I rate has fallen to 0.75 per cent – below we reveal where to find a better deal
It’s tough to get that much interest now, but one day rates will rise.
Money sheltered in an Isa will deliver a tax-free income, even above that £1,000 level and if you are building up a long-term pot, you may one day be grateful for that.
And who knows if the personal savings allowance will be around forever – it is much more likely to disappear than the Isa wrapper.
For the 2018-19 financial year, which began on 6 April 2018, the cash Isa limit is £20,000.
You can read our round-up of our five favourite cash Isas here.
If you are fed-up of low cash Isa rates, why not consider a stocks and shares version – you can read all about how to get started here.
Best buy cash Isa rates
Easy-access: Virgin Money Double Take Isa (1.35%)
Who knows if the personal savings allowance will be around forever – it is much more likely to disappear than the Isa wrapper
One-year: Al-Rayan Bank (1.6%)
Two-year: Al-Rayan Bank (1.8%)
Three-year: Monmouthshire BS (1.91%)
Five-year: Coventry BS (2.3%)
Junior Isa: Coventry BS (3.6%)
Lifetime Isa: Skipton BS (1%)
THIS IS MONEY’S FIVE OF THE BEST SAVINGS DEALS