ISA season kicks off early
Price comparison site moneysupermarket.com says ISA providers are bringing their headline-grabbing cash ISA offerings out earlier than in previous years.
It believes this desire to secure more deposits is due to last year’s Northern Rock debacle, which highlighted the need for providers to have substantial deposits.
Kevin Mountford, head of savings at moneysupermarket.com, said: “This week, we saw Icesave’s Mini Cash ISA enter the market paying 6.1% AER, following hot on the heels of Scarborough Building Society’s new Direct Notice ISA, which tops the table at 6.3%.
“The top-paying cash ISA of a year ago wouldn’t even make today’s top 10, showing how keen banks are to lock in your cash as early as possible. By starting the rush now rather than closer to April, it will alleviate some of the pressure providers usually face when they have to process so many accounts in such a limited period.”
Moneysupermarket.com warns that savers shouldn’t be blinded solely by the figures and that they need to look at the notice period and whether they allow transfers in.
Mountford added: “If you’ve been using your ISA allowance diligently for a number of years, you’re likely to have a tidy sum stashed away that you could transfer into a new, higher-paying account. About half of the top ISAs on the market don’t allow you to transfer previous lump sums in, so savers need to read the small print.”