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One-year fixed cash ISA average rate reaches a 15-year high of 5%

Nick Cheek
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Nick Cheek

The average rate of a one-year fixed ISA has climbed to a gross 5%, the highest it has been since November 2008, according to a financial comparison website.

Moneyfacts said that this follows the course of steadily rising saving rates across the market throughout July, as ISA providers have been pricing in potential further hikes to interest rates. Indeed, just hours ago, the Bank of England decided to raise the base rate for the 14th consecutive time to 5.25%.

Only last month, the average returns on one- and two-year fixed rate bonds both rose to 5.03%, the first time they have surpassed the 5% mark since 2008.

Average rates on ISAs are an important feature, as it provides an accurate picture of how the market is performing.

Customers are advised to review the ISA savings market to ensure that you are receiving the most competitive rate.

Shawbrook and Virgin offer highest rate

The market-leading annual equivalent rate (AER) is currently being paid at 5.71%  by Shawbrook Bank’s 1 Year Fixed Rate Cash ISA Bond Issue 79, and Virgin Money’s 1 Year Fixed Rate Cash E-ISA Issue 611.

Alternatively, the financial comparison website revealed that NatWest and Royal Bank of Scotland, are providing competitive options, with both their 1 Year Fixed Rate ISA Issue 326 accounts, having just a slightly lower AER of 5.70%.

Meanwhile, Tesco Bank is offering the third best rate on the market, with its Fixed Rate Cash ISA paying 5.60% AER.