New £20,000 Isa allowance – where to find the best savings rates

Isa-form-with-pound-coin

Last week Mark Carney, governor of the Bank of England, said interest rates could rise in the ‘relatively near term’.

It is the clearest indication yet that there could be a rise from its historic 0.25 per cent low as early as November 2 when the Monetary Policy Committee meets to decide base rate.

Rates on easy-access accounts have been edging up. Top deal online comes from Charter Savings Bank at 1.26 per cent. In the high street, rates are lower with the best deal at 1.15 per cent from Kent Reliance.

On fixed rate bonds the best one-year deal comes from newcomer Wyelands Bank at 1.83 per cent online or 1.3 per cent in the high street from Virgin Money. For two years Atom and Paragon banks pay 2.05 per cent.

Rates on cash Isas are lower. The top easy-access deal is 1.1 per cent from Charter Savings Bank while both Coventry Building Society and Paragon Bank pay 1.05 per cent. Charter Savings also offers the best fixed rate deals at 1.4 per cent for one year or 1.65 per cent for two years.

 

- National Savings and Investments launches market-leading 2.2 savings bonds  

How to beat inflation

To beat inflation, currently running at 2.9 per cent, compromises need to be made as all of the small number of regular savings accounts that pay more than inflation require savers to have a current account with the provider. Our sister publication Moneywise regularly keeps tabs on the savings market and has found there are nine accounts that currently beat inflation.

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