As we move towards ISA season, February saw an increase in competition between savings providers resulting in a number increasing their ISA rates and launching new deals.
During the month some of the best rates came from Virgin Money, which offered a rate of 1.45% AER/Gross on its easy access ISA; Cynergy Bank, which offered 1.73% AER/Gross on its one-year fixed ISA; and Coventry Building Society, which offered a rate of 1.90% AER/Gross on its two-year fixed rate ISA and 2.30% AER/Gross on its five-year deal.
To help make it clearer about which providers were offering the best ISA rates last month, here’s our round-up the top ISA rates in February 2019.
February saw a rise in savings rates on several one-year fixed rate ISAs and, by the end of the month, Charter Savings Bank was offering the best deal with its 1 Year Fixed Rate Cash ISA.
This online-only account offered savers a rate of 1.75% AER/Gross on a one-year bond that required a minimum of £1,000 to open. This cash ISA allowed additional deposits within 30 days of account opening, as well as withdrawals, however those wanting to benefit from this earlier access were subject to 150 days’ loss of interest.
Also increasing rates last month was Shawbrook Bank, with an uplift to its 1 Year Fixed Rate Cash ISA Bond Issue 29 resulting in it paying 1.74% AER/Gross. This one-year fixed rate cash ISA paid interest on maturity and required a minimum deposit of £1,000. The account allowed further additions, as well as withdrawals and early access subject to a 90-day loss of interest penalty. At the end of February, the third-best rate for a one-year fixed rate ISA came from Cynergy Bank, with its Fixed Rate Cash ISA paying 1.73% AER/Gross, an account and rate that topped the chart in January.
During February, Charter Savings Bank was also offering the best rate for a two-year fixed rate cash ISA, paying 1.95% AER/Gross.
This two-year bond required a minimum deposit of £1,000 and paid interest on its anniversary. It allowed further additions for a limited period as well as withdrawals, but this early access was subject to 180 days’ loss of interest. Another competitive two-year fixed rate ISA last month came from Shawbrook Bank with its 2 Year Fixed Rate Cash ISA Bond Issue 28 offering a rate of 1.91% AER/Gross. The account needed a minimum deposit of £1,000 to open and allowed further additions, while withdrawals and early access were also permitted subject to a 180-day loss of interest penalty.
Overall the best long-term fixed ISA rate still available at the end of February came from Coventry Building Society with a rate of 2.30% AER/Gross. Its Fixed Rate ISA (75) 30.11.2023 has a fixed term until the end of November 2023, required a minimum deposit of £1 and paid interest yearly. It allowed further additions for the 2018/19 tax year within 14 days of account opening or while the issue remains open (whichever is longer), but not withdrawals, with early access only allowed on closure and the loss of 180 days’ interest.
Also nearing the top last month was State Bank of India, which was offering 2.15% AER/Gross on its 5 Years Cash ISA Fixed Deposit account. This five-year ISA needed a minimum deposit of £5,000 to open and did not allow further additions or withdrawals, with early access on closure only and subject to 30 days’ notice. No interest would be paid if the account was closed before the first anniversary and there was a 1% loss of interest if closed after that time.
Within the variable rate cash ISA market in February, Virgin Money took first and second place on the Best Buy chart when it increased the rate on its Double Take E-ISA Issue 5 and Man Utd Double Take E-ISA Issue 4 accounts that both offered a variable rate of 1.45% AER/Gross from a minimum deposit of just £1. These accounts allowed further additions to be made and permitted two withdrawals per calendar year. OakNorth was also offering a variable rate of 1.45% AER (1.44% Gross) on its Easy Access Cash ISA, which paid interest monthly, while Charter Savings Bank was another provider offering 1.45% AER/Gross on its 95 Day Notice Cash ISA – Issue 4.
The re-launch of Paragon Bank’s Limited Edition Easy Access ISA was the biggest news in the flexible ISA sector. This account offered savers the best deal in January with its rate of 1.45% yearly, or 1.44% on a monthly basis. Savers needed to be quick to open the account as, true to its name, it was only available for a limited time and was removed from the market in February.
For short-term savers, there was a lot of competition in the one-year fixed rate cash ISA sector. This started when Aldermore increased the rate on its product to 1.70%, which Coventry Building Society quickly followed by raising the rate on its own one-year fixed rate ISA to offer savers the same rate. Usurping both Aldermore and Coventry Building Society by the end of January was Cynergy Bank, which increased its rate to offer savers 1.73%.
While the long-term ISA sector didn’t see the same level of competition as the one-year fixed rate market, there were still some good deals around for savers. The best January deals for long-term ISAs came from Coventry Building Society, which offered a two-year ISA at the rate of 1.90% and a three-year ISA at 2.05%. Overall, the best rate across all ISAs in January came from Coventry Building Society with its five-year ISA rate of 2.30%.
Information is correct as of the date of publication (as shown in the heading of this article). Any products featured may be withdrawn by their provider or changed at any time.