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Cash ISA rates on the rise as new tax-year approaches

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Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert T: 01603 476210 E: Email Rachel
06/02/2023

Cash ISA rates on the rise as new tax-year approaches

ISA season is looking hopeful this year as Cash ISA rates have risen substantially over the past 12 months, according to the latest analysis by Moneyfactscompare.co.uk.

Cash ISA rates on the rise as new tax-year approaches

ISA season is looking hopeful this year as Cash ISA rates have risen substantially over the past 12 months, according to the latest analysis by Moneyfactscompare.co.uk.

  • Top ISA rates have risen considerably over the past 12 months, across easy access, notice, one-year and five-year fixed terms. Non-ISA rates are also on the rise for savers who wish to utilise their Personal Savings Allowance (PSA).
  • Those who locked into the top one-year fixed rate ISA a year ago will find the equivalent top deal now pays more than four times the amount of interest.
  • The top rate on a five-year fixed ISA pays almost twice the rate than the equivalent deal in February 2018.
  • Top ISA rates have risen considerably over the past 12 months, across easy access, notice, one-year and five-year fixed terms. Non-ISA rates are also on the rise for savers who wish to utilise their Personal Savings Allowance (PSA).
  • Those who locked into the top one-year fixed rate ISA a year ago will find the equivalent top deal now pays more than four times the amount of interest.
  • The top rate on a five-year fixed ISA pays almost twice the rate than the equivalent deal in February 2018.

 

Savings market analysis – average rates and top rates

Average savings rates

Feb-18

Feb-22

Feb-23

Easy access ISA

0.78%

0.26%

1.85%

Easy access (non-ISA)

0.48%

0.21%

1.73%

Notice ISA

0.96%

0.37%

2.57%

Notice account (non-ISA)

0.79%

0.53%

2.55%

One-year fixed rate ISA

1.12%

0.60%

3.41%

One-year fixed rate bond

1.19%

0.84%

3.61%

Five-year fixed rate ISA

1.85%

1.40%

3.68%

Five-year fixed rate bond

1.97%

1.51%

4.04%

Average rates (gross) based on a £10,000 deposit on a 1st of month basis.
Source: Moneyfacts.co.uk

Top rates

Feb-18

Feb-22

06-Feb-23

Easy access ISA

Virgin Money – 1.21%

Shawbrook Bank – 0.61%

Newcastle BS – 3.05%

Easy access (non-ISA)

RCI Bank UK – 1.30%

Investec Bank plc – 0.71%

Newcastle BS – 3.05%

Notice ISA

Marsden BS (120 day) – 1.30%

Aldermore (30 day) – 0.55%

Loughborough BS (120 day) – 3.05%

Notice account (non-ISA)

Secure Trust Bank (180 day) – 1.65%

Shawbrook Bank (120 day) – 1.08%

Furness BS (120 day) – 3.50%

One-year fixed rate ISA

Leeds BS – 1.45%

Coventry BS – 1.00%

Virgin Money – 4.25%

One-year fixed rate bond

Atom Bank – 1.95%

Union Bank of India (UK) Ltd – 1.40% (payable on maturity)

SmartSave – 4.17%

Five-year fixed rate ISA

United Bank UK* – 2.24% (payable on maturity)

UBL UK – 1.82% (payable on maturity)

UBL UK – 4.46% (payable on maturity)

Five-year fixed rate bond

Secure Trust Bank – 2.43%

UBL UK – 2.19% (payable on maturity)

UBL UK – 4.63% (payable on maturity)

Top rates (gross) based on a £10,000 deposit, on a 1st of month basis unless specified, for new customers. Higher rates may be available for other levels of deposit. *Now UBL UK. Source: Moneyfacts.co.uk

 

 

Savings market analysis – average rates and top rates

Average savings rates

Feb-18

Feb-22

Feb-23

Easy access ISA

0.78%

0.26%

1.85%

Easy access (non-ISA)

0.48%

0.21%

1.73%

Notice ISA

0.96%

0.37%

2.57%

Notice account (non-ISA)

0.79%

0.53%

2.55%

One-year fixed rate ISA

1.12%

0.60%

3.41%

One-year fixed rate bond

1.19%

0.84%

3.61%

Five-year fixed rate ISA

1.85%

1.40%

3.68%

Five-year fixed rate bond

1.97%

1.51%

4.04%

Average rates (gross) based on a £10,000 deposit on a 1st of month basis.
Source: Moneyfacts.co.uk

Top rates

Feb-18

Feb-22

06-Feb-23

Easy access ISA

Virgin Money – 1.21%

Shawbrook Bank – 0.61%

Newcastle BS – 3.05%

Easy access (non-ISA)

RCI Bank UK – 1.30%

Investec Bank plc – 0.71%

Newcastle BS – 3.05%

Notice ISA

Marsden BS (120 day) – 1.30%

Aldermore (30 day) – 0.55%

Loughborough BS (120 day) – 3.05%

Notice account (non-ISA)

Secure Trust Bank (180 day) – 1.65%

Shawbrook Bank (120 day) – 1.08%

Furness BS (120 day) – 3.50%

One-year fixed rate ISA

Leeds BS – 1.45%

Coventry BS – 1.00%

Virgin Money – 4.25%

One-year fixed rate bond

Atom Bank – 1.95%

Union Bank of India (UK) Ltd – 1.40% (payable on maturity)

SmartSave – 4.17%

Five-year fixed rate ISA

United Bank UK* – 2.24% (payable on maturity)

UBL UK – 1.82% (payable on maturity)

UBL UK – 4.46% (payable on maturity)

Five-year fixed rate bond

Secure Trust Bank – 2.43%

UBL UK – 2.19% (payable on maturity)

UBL UK – 4.63% (payable on maturity)

Top rates (gross) based on a £10,000 deposit, on a 1st of month basis unless specified, for new customers. Higher rates may be available for other levels of deposit. *Now UBL UK. Source: Moneyfacts.co.uk

 

Rachel Springall, Finance Expert at Moneyfacts.co.uk, said:

“Savers have just a couple of months left until the new tax-year begins, so time is ticking for them to utilise their current ISA allowance. Thankfully, the run-up to ISA season is looking bright as rates are much more favourable than they were a year ago. Those savers who locked into a top one-year fixed rate ISA a year ago will find the equivalent top deal pays more than four times the amount of interest. Consumers who prefer a longer-term fixed ISA will be pleased to see much higher rates when they come off their current deal this year, as the top rate on a five-year fixed ISA is over 2% higher than the equivalent deal in 2018.

“It is still possible that savers may forgo using their ISA allowance due to the top returns available outside of an ISA wrapper, as many savers will find their earned interest is protected under the Personal Savings Allowance (PSA) which has been in force since 2016. However, rising interest rates could result in consumers with larger pots breaching their individual allowance, which is why ISAs offer considerably more suitable longer-term tax-free benefits. The PSA allows basic rate taxpayers to take home up to £1,000 worth of savings interest tax-free each year (£500 for higher rate taxpayers), so it’s worth comparing deals away from ISAs carefully with this in mind.

"Savers will need to check their rate regularly to keep on top of the latest rate rises and remember that they can look for an alternative deal that allows them to transfer in their current ISA to keep their tax-free wrapper intact. There are also many types of ISAs to consider away from a traditional cash ISA, such as stocks and shares ISAs and Lifetime ISAs which can be more beneficial for specific goals.”

Rachel Springall, Finance Expert at Moneyfacts.co.uk, said:

“Savers have just a couple of months left until the new tax-year begins, so time is ticking for them to utilise their current ISA allowance. Thankfully, the run-up to ISA season is looking bright as rates are much more favourable than they were a year ago. Those savers who locked into a top one-year fixed rate ISA a year ago will find the equivalent top deal pays more than four times the amount of interest. Consumers who prefer a longer-term fixed ISA will be pleased to see much higher rates when they come off their current deal this year, as the top rate on a five-year fixed ISA is over 2% higher than the equivalent deal in 2018.

“It is still possible that savers may forgo using their ISA allowance due to the top returns available outside of an ISA wrapper, as many savers will find their earned interest is protected under the Personal Savings Allowance (PSA) which has been in force since 2016. However, rising interest rates could result in consumers with larger pots breaching their individual allowance, which is why ISAs offer considerably more suitable longer-term tax-free benefits. The PSA allows basic rate taxpayers to take home up to £1,000 worth of savings interest tax-free each year (£500 for higher rate taxpayers), so it’s worth comparing deals away from ISAs carefully with this in mind.

"Savers will need to check their rate regularly to keep on top of the latest rate rises and remember that they can look for an alternative deal that allows them to transfer in their current ISA to keep their tax-free wrapper intact. There are also many types of ISAs to consider away from a traditional cash ISA, such as stocks and shares ISAs and Lifetime ISAs which can be more beneficial for specific goals.”

Notes to editors

Pioneering financial comparison technology for over 35 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

We hope you find this press release insightful. We would appreciate a link back to Moneyfactscompare.co.uk if you decide to source this information.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

Notes to editors

Pioneering financial comparison technology for over 35 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

We hope you find this press release insightful. We would appreciate a link back to Moneyfactscompare.co.uk if you decide to source this information.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

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James Hyde Press & PR Manager
Rachel Springall Press Officer / Finance Expert
Caitlyn Eastell Apprentice Press & PR Assistant