Money Insider: Santander and Halifax set the pace for ISAs
Friday 08 March 2013
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
Bank finally sees sense over £6,000 charge for redeeming mortgage two days early
Five Questions On: GB Energy's new tariff
Questions of Cash: 'I want a refund on my TV licence payments but they've turned my claim into a soap opera'
Bank-beating exchange rates on your international payments
Be warned of the dirty tricks the bailiffs pull
- 1 Malaysia issues arrest warrant for Gordon Brown’s sister-in-law after she publishes stories on leader Najib Razak's financial affairs
- 2 Porn block in India: hundreds of sexual websites banned, internet outraged
- 3 Natalia Molchanova: World's most successful free-diver missing and feared dead after disappearing in Mediterranean
- 4 Dutch King Willem-Alexander declares the end of the welfare state
- 5 Gamers confess the worst things they've done in The Sims
Is Britain really full up? Are migrants taking our jobs? Leading academic answers the most common anti-immigration claims
Calais Migrant Crisis: Deputy Mayor of Calais labels Cameron's use of 'swarm' as 'racist' and 'ignorant'
Chris Leslie: Jeremy Corbyn's anti-austerity agenda will harm the poor, says Labour shadow Chancellor
Jeremy Corbyn: Tony Blair could face war crimes trial over 'illegal Iraq invasion'
Landlords renting properties to illegal immigrants to face up to five years in prison
While we fixate on Calais, the Home Office is quietly deporting dozens of migrants on 'ghost flights'
iJobs Money & Business
£35 - 38k + Benefits & Bonus: Guru Careers: We are seeking an Account Manager ...
£20000 - £25000 per annum + OTE £45K: SThree: At SThree, we like to be differe...
£50 - 80k: Guru Careers: We are seeking an Associate Director for the Markets ...
£60 - 100k: Guru Careers: Our client is looking for an Associate Director of S...
Day In a Page
Built on a former chapel site, this impressive four-bedroom home boasts balconies, stunning views and contemporary modern living.
This three-bedroom house is situated in a quiet mews and set over three floors. Features include glazed staircases and high ceilings.
A period townhouse set over four floors, this five-bedroom home was built in the 18th Century and retains many original features.
With five bedrooms, this spacious home offers beautiful gardens and modern interiors - set within the popular market town of Bingley.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This first-floor flat comes with two bedrooms, an impressive open-plan reception room and two lovely roof terraces.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Moored at Taggs Island and reached via a pretty garden, this two-bedroom houseboat has a vaulted reception room and skylit garden studio - currently a beauty salon.
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
A contemporary house spread over three storeys, this three-bedroom detached home has large sliding doors that open out to the River Quaggy.
Moored in Chelsea's Cheyne Walk, this houseboat offers two double bedrooms and a teak deck that's ideal for al-fresco dining.
This former village bakery, dating back to the 17th century, is now a three-bedroom detached home just a few miles from the East Sussex coast.
On the picturesque Isle of Man, this four-bedroom character home has a ground-floor shop that's currently run as a newsagents and a flat that would make an ideal holiday let.
In a new collection of flats, this first-floor two-bedroom apartment offers ample entertaining space and a prime view of Furze Green from a private balcony.
This three-bedroom stone-built cottage currently trades as the village store with a restaurant in the annexe and family accommodation on the upper floors.
Previously two semi-detached properties, this five-bedroom home is spread over three floors with a large breakfast kitchen, orangery, office and gym on the second floor.
This five-bedroom home enjoys countryside views over the Blyth estuary to Southwold, offering flexible living space with a ground-floor annexe - ideal for use as a holiday let.
Close to the market town of Eye, this four-bedroom detached home offers a double-height living room which takes the place of the original, 19th-century, chapel nave.
Dating back to the 19th century, this four-bedroom home needs modernising. Spanning three storeys, the red-brick house has a fireplace, a small terrace and a cellar.
Just outside of Cambridge, this single-storey home offers three double bedrooms, a living room with vaulted timber ceiling and ladder steps that lead to a mezzanine study area.
This six-bedroom Georgian home is on three floors with open fireplaces, a two oven Aga, an annexe, and cottage gardens with outbuildings and a car barn.
A former coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, an attached office, kennels and an outbuilding that's currently used as a gym.
Located beside an impressive Victorian viaduct, this four-bedroom home has an open-plan living area that is glazed on two sides, with skylights and high ceilings.
A former furniture workshop, this three-bedroom home has high ceilings and painted brick walls, in a village setting only fifteen miles from the coast.
This five-bedroom stone townhouse features a pine staircase and an Inglenuk fireplace, double doors from the lounge give access to an enclosed courtyard.
This five-bedroom, detached home blends traditional and modern design; the sleek kitchen features a gas hob and oven set within an exposed chimney breast.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B or countryside retreat, subject to change of use permissions.
This Grade II-listed three-bedroom home is situated on a private road, just a short walk from the sandy beaches of Frinton-on-Sea.
Less than five miles from Malmesbury, this four-bedroom cottage comes with equestrian facilities and gardens that extend to approximately three acres.
Spanning three storeys, this late-Victorian five-bedroom farmhouse is a spacious family home with a modern interior and B&B potential.
With an original church arch, this triplex one-bedroom church conversion has a light, spacious, feel and comes with a secure off-street parking space.
This recently-refurbished three-bedroom home has bi-folding doors that lead out to a decked seating area - ideal for alfresco dining this summer.
Well-located for coastal walks and popular restaurants, this detached four-bedroom home offers views over farmland, to the Solent, the Purbecks and Bournemouth.
If you love high ceilings, school conversions like this one are bang on the money. This two-bedroom flat is minutes from Burgess Park and the foodie haven at Borough Market.
Set within a church conversion in Bermondsey, this two-bedroom maisonette combines existing features, such as original arches and brickwork, with a contemporary finish.
This four-bedroom Edwardian home offers a combination of original features and contemporary design after a renovation by the current owners.
This four-bedroom home offers a vaulted ceiling in a breakfast room that's ideal for summer entertaining with doors that open to the patio and garden.
On the market for the first time in more than 50 years, this six-bedroom home is a project with vast potential - spread over three floors of living space.
Surrounded by rolling countryside, this four-bedroom barn conversion comes with a self-contained, one-bedroom annexe that could serve as an office or a holiday let.
Located near Harrogate town centre, this five-bedroom Victorian terrace is arranged over three storeys while a current study serves as an optional sixth bedroom.
A ground-floor flat in a country house, located a mile from Sway; this two-bedroom home would make an ideal weekend retreat on the edge of the New Forest.
On a popular residential lane in Caterham on the Hill, this four-bedroom family home offers a secluded garden and a convenient location for local schools and public transport.
Just a short walk from Westerham green, this three-bedroom cottage has a light kitchen with exposed brickwork and double doors that lead to a south-facing garden.
In a prime spot opposite the River Thames, this one-bedroom flat has an 18sq ft reception room with glass doors that open out to a private terrace.
Set in the hills above Llanwrda Village, west Wales, this 18th-century three-bedroom farmhouse has holiday-let potential from a separate barn conversion and annexe.
This charming end-of-terrace townhouse is arranged over three floors, with two double bedrooms and a private courtyard garden located at the rear of the property.