Money Insider: Santander and Halifax set the pace for ISAs

 

With the tax-year crossover a little under four weeks away, it's that time of year when many consumers start to pay closer attention to the interest rates on offer in the individual savings account (Isa) market.

Usually the window from early March through to the end of May is where the bank and building society marketing teams go into overdrive as they fight tooth and nail to cement a prized position in the best-buy tables.

However this year is very different, with Isa rates suffering a similar decline to those seen in the wider savings market due to the impact of the Government offering cheap money to providers via its Funding for Lending scheme.

Because the demand for savings balances has diminished, the usual fight to offer the top rates hasn't really materialised, although some better deals have come to light in the last few days.

Savers keen to get the best return on their tax-free cash will be heartened by the new cash Isas launched by Santander and Halifax this week.

The latest deals from Santander include an instant-access Isa paying 2.5 per cent and a two-year fixed rate at 2.8 per cent, both of which offer the flexibility and convenience of allowing customers to transfer in tax-free balances accumulated in previous years.

Similar to the two-year fixed-rate offer last year, Santander will pay an additional 0.1 per cent if Rory McIlroy wins a golfing major in the next two years. For existing or new customers with a Santander 123 credit card or current account, the two-year fix is offered at an enhanced rate of 3 per cent plus the 0.1 per cent McIlroy incentive.

If you're looking for a higher return then it will mean locking your cash up for a longer term, with the latest Isas from Halifax leading the way at 3 per cent for three years and 3.1 per cent for five years.

Despite the appearance of these better deals this week, rates still look poor in comparison with what was on the table 12 months ago, when it was possible to earn 3.3 per cent on an instant-access Isa, 3.7 per cent for a two-year fix and as high as 4.4 per cent if you were prepared to tie your funds up for five years.

Even though the lower returns have diminished, making full use of your annual, tax-free Isa allowance is still a smart move to make as it protects your funds from the taxman, not just for this year, but for years to come too.

Technology can keep you clear of unwanted bank charges

Anyone who has accidentally slipped into the red on their current account or exceeded their agreed overdraft limit will never forget the £20 or £30 rap on the knuckles from their bank for the oversight.

If you're constantly on the move and don't have the chance to check your account as often as you'd like, most banks offer a text alert service, where a message is sent to your phone showing a weekly mini-statement or when a large debit or credit appears on your account.

Lloyds TSB and Barclays are just a couple of the providers now offering this service for free as part of their mobile-banking applications, and you can also set up free text alerts for high balances, low balances and when you are getting close to your limit.

If you have a smartphone, you'll find that all the main banks offer a mobile banking option for your iPhone or BlackBerry. As long as you are already registered for online banking on your PC, you can opt for banking on your phone too. You can see the last few transactions on your account and make payments and transfers.

With your bank account at your fingertips, you can take a look at your balance or a make a transfer during some of your daily "dead" time – maybe on the train journey to or from work.

If you want to delve deeper and understand more about where your money is being spent, the Money Manager Service from Lloyds TSB enables you to do this. You can also see at a glance what payments are due to be made over the coming days or weeks – something that could help you stay out of the red.

Even if you only use those services on the odd occasion, it's worth signing up for, as it could help you avoid being clobbered with unwelcome bank charges.

Andrew Hagger is an independent personal finance analyst from moneycomms.co.uk

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Suggested Topics
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Customer Service Advisor

    £15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

    Recruitment Genius: Compliance Manager

    £40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

    SThree: Talent Acquisition Consultant

    £22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...

    Day In a Page

    John Palmer: 'Goldfinger' of British crime was murdered, say police

    Murder of the Brink’s-MAT mastermind

    'Goldfinger' of British crime's life ended in a blaze of bullets, say police
    Forget little green men - aliens will look like humans, says Cambridge University evolution expert

    Forget little green men

    Leading evolutionary biologist says aliens will look like humans
    The Real Stories of Migrant Britain: An Algerian scientist adjusts to life working in a kebab shop

    The Real Stories of Migrant Britain

    An Algerian scientist struggles to adjust to her new life working in a Scottish kebab shop
    Bodyworlds museum: Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy

    Dying dream of Doctor Death

    Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy
    UK heatwave: Temperature reaches 39.8 degrees on Central Line - the sweatiest place in London

    39.8 degrees recorded on Tube

    There's hot (London) and too damn hot (the Underground). Simon Usborne braved the Central line to discover what its passengers suffer
    Kitchens go hi-tech: From robot chefs to recipe-shopping apps, computerised cooking is coming

    Computerised cooking is coming

    From apps that automatically make shopping lists from your recipe books to smart ovens and robot chefs, Kevin Maney rounds up innovations to make your mouth water
    Jessie Cave interview: The Harry Potter star has published a feminist collection of cartoons

    Jessie Cave's feminist cartoons

    The Harry Potter star tells Alice Jones how a one-night stand changed her life
    Football Beyond Borders: Even the most distruptive pupils score at homework club

    Education: Football Beyond Borders

    Add football to an after-school homework club, and even the naughtiest boys can score
    10 best barbecue books

    Fire up the barbie: 10 best barbecue books

    We've got Bibles to get you grilling and smoking like a true south American pro
    Wimbledon 2015: Nick Bollettieri - Junk balls and chop and slice are only way 5ft 1in Kurumi Nara can live with Petra Kvitova’s power

    Nick Bollettieri's Wimbledon Files

    Junk balls and chop and slice are only way 5ft 1in Kurumi Nara can live with Petra Kvitova’s power
    Ron Dennis exclusive: ‘This is one of the best McLaren teams ever – we are going to do it’

    ‘This is one of the best McLaren teams ever – we are going to do it’

    Ron Dennis shrugs off a poor start to the season in an exclusive interview, and says the glory days will come back
    Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

    Making of a killer

    What motivated a shy student to kill 38 holidaymakers in Tunisia?
    UK Heatwave: Temperatures on the tube are going to exceed the legal limit for transporting cattle

    Just when you thought your commute couldn't get any worse...

    Heatwave will see temperatures on the Tube exceed legal limit for transporting cattle
    Exclusive - The Real Stories of Migrant Britain: Swapping Bucharest for London

    The Real Stories of Migrant Britain

    Meet the man who swapped Romania for the UK in a bid to provide for his family, only to discover that the home he left behind wasn't quite what it seemed
    Cheaper energy on the way, but it's not all sunshine and rainbows

    Cheaper energy on the way, but it's not all sunshine and rainbows

    Solar power will help bring down electricity prices over the next five years, according to a new report. But it’s cheap imports of ‘dirty power’ that will lower them the most