This could be the last chance for savers to get a one-year fixed-rate Isa paying a rate of 5 per cent.
Over the festive period, fixed-rate bonds and Isas tumbled. But there is still a window of opportunity for savers to nab what could be the last two remaining one-year fixed-rate Isas paying 5 per cent.
Shawbrook Bank and Kent Reliance are now the only providers on This is Money’s best buy tables offering savers an Isa paying 5 per cent or more over 12 months.
Grab a 5% account: There are only two account in our best buy tables offering savers a rate of 5 per cent or more
Shawbrook’s account has bucked the trend of rates being slashed, upping its interest rate for new savers from 4.6 per cent 5.01 per cent, while Kent Reliance is hot on its heels paying 5 per cent.
One savings expert says he does not expect savers will be able to get these rates for much longer — possibly less than 10 days.
James Blower, founder of website Savings Guru says: ‘These accounts are unlikely to be around any longer than the end of next week.
‘One Isa account paying over 5 per cent was slashed yesterday and I think Kent Reliance will cut its rate this week. I don’t see Shawbrook’s account surviving beyond next week.’
Easy-access accounts have fared slightly better than their fixed-rate counterparts and are not being slashed at the same rapid pace.
James Bower says: ‘We are in the unusual position where easy-access savings and easy-access Isa rates are largely higher than fixed rates.
There are still three easy-access Isas paying a rate of 5 per cent or more.
The best easy-access Isa is currently offered by Zopa Bank and pays 5.08 per cent, followed by Cynergy Bank and Family Building Sociey which both pay 5 per cent.
Family Building Society’s account is a tracker account and the rate is next being reviewed in March.
James Blower adds: ‘While the base rate holds at 5.25 per cent, we expect easy-access savings accounts and easy-access Isa rates to hold up at current levels with rates of 5 per cent or more, which are still available.
‘Expect the best buys to consolidate at around 5 per cent to 5.1 per cent in the next couple of months though in anticipation of the next base rate move being downwards to 5 per cent in the spring.’
The advice for savers across the board is to be quick and snap up the top rates while they are around.
Though fixed-rates are falling, savers can still get a good rate of 5 per cent on a tax-free deal.
Higher interest rates have been good news for savers, but it has put more in danger of breeching their personal allowance, which is £1,000 for basic rate tax payers and £500 for higher rate tax payers.
Cash Isas are a tax-friendly way for savers to to shelter their nest eggs from a savings interest tax raid. You can put up to £20,000 into one each tax year, which runs from April 6 to April 5 the following year.
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