Eager to squirrel away some cash? Now’s the time to do it as UK banks gear up for the 2011 Isa season.
Isas are the special high interest accounts that can protect up to £10,200 a year from the taxman.
As the 5 April end of tax year deadline beckons, savers everywhere are sniffing out a new safe haven for their cash. Nationwide has launched a best buy 2.9% instant access account and Yorkshire a 3.5% two-year fix deal that pays 0.2 percentage points more than its nearest rival, the Aldermore Bank.
Thanks to the 0.5% Bank of England base rate, these deals are well down on the 5.3% average of February 2008 but they are up on a year ago, as rumours circulate of a base rate hike in the near future.
Kevin Mountford, of Moneysupermarket.com, looks forward to improved prospects for savers and warns that there’s a huge gap between the worst and best deals out there.
'The traditional Isa season has started earlier than previous years and in general, savings providers are being more aggressive than normal,' he says.
'As the nation's purses continue to be squeezed by rising inflation, it is imperative consumers do as much as possible to protect their savings pots. If you have had an Isa for more than twelve months, the chances are you will be on a much lower rate of interest so it would be beneficial to switch.'