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

“ISA season is in full swing with top rate deals seeing an improvement since last month. Savers who are also looking at accounts that do not have an ISA tax-free wrapper will be pleased to see several top rate deals are now paying higher returns, whereas a few other deals remain competitive. Inflation continues to diminish the true spending power of savers’ cash, but this should not deter consumers from shopping around for a better deal. Providers are making notable improvements to ISAs as we edge closer to the new tax year, so it’s vital savers take note of the latest offers to hit the market and move quickly to take advantage.

“Those savers who are coming off a one-year fixed bond or ISA will notice rates are much higher today for an equivalent deal. Both the top one-year fixed bond and one-year fixed ISA paid less than 2% a year ago, however, today the top deals pay 4% or more. This will be great news for savers who prefer to make a lump sum and even take interest as a form of monthly income. Challenger banks continue to dominate the highest positions within the top rate tables, but they can move quickly to pull a deal in high demand, as they typically focus on securing balances to fund their future lending.

“Savers who prefer to keep their cash in a flexible account must still take time to check their interest rate regularly, especially to establish if their provider has not passed on base rate rises. Time is ticking for consumers to use their ISA allowance, however, savers will notice a rate difference between fixed bonds and ISAs remains, so they must be aware of both their Personal Savings Allowance (PSA) and ISA allowance. To make the search for a competitive return easier, it would be wise for savers to sign up to rate alerts and newsletters to keep them up to date.”

*Data note: Please note that these savings product numbers only include deals that are available to UK residents (easy access, notice, fixed rate bonds, variable or fixed ISAs) and exclude regular savers and children’s savers (this figure does not count each interest payment option for each account), based on a £10,000 deposit. Higher rates may be available for other levels of deposit.