After years in the doldrums, cash ISA rates are rising rapidly thanks to rapid increases in the bank rate which rose to 4% last week.
The average easy access ISA rate has risen from 0.26% in February 2022 to 1.85% this month, according to data provider Moneyfacts.
While cash ISA rates have risen they are still well below CPI inflation which remains over 10%.
Moneyfacts says cash ISA rates have risen “substantially” over the past 12 months.
- Top ISA rates have risen considerably over the past 12 months, across easy access, notice, one-year and five-year fixed terms
- Non-ISA rates are also on the rise for savers who use their their Personal Savings Allowance (PSA)
- Those who locked into the top one-year fixed rate ISA a year ago will find the equivalent top deal now pays more than four times the amount of interest
- The top rate on a five-year fixed ISA pays almost twice the rate than the equivalent deal in February 2018
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Savings market analysis – average rates and top rates
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Average savings rates
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Feb-18
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Feb-22
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Feb-23
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Easy access ISA
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0.78%
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0.26%
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1.85%
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Easy access (non-ISA)
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0.48%
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0.21%
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1.73%
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Notice ISA
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0.96%
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0.37%
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2.57%
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Notice account (non-ISA)
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0.79%
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0.53%
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2.55%
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One-year fixed rate ISA
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1.12%
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0.60%
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3.41%
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One-year fixed rate bond
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1.19%
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0.84%
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3.61%
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Five-year fixed rate ISA
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1.85%
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1.40%
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3.68%
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Five-year fixed rate bond
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1.97%
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1.51%
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4.04%
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Average rates (gross) based on a £10,000 deposit on a 1st of month basis.
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Top rates
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Feb-18
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Feb-22
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06-Feb-23
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Easy access ISA
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Virgin Money – 1.21%
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Shawbrook Bank – 0.61%
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Newcastle BS – 3.05%
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Easy access (non-ISA)
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RCI Bank UK – 1.30%
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Investec Bank plc – 0.71%
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Newcastle BS – 3.05%
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Notice ISA
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Marsden BS (120 day) – 1.30%
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Aldermore (30 day) – 0.55%
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Loughborough BS (120 day) – 3.05%
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Notice account (non-ISA)
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Secure Trust Bank (180 day) – 1.65%
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Shawbrook Bank (120 day) – 1.08%
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Furness BS (120 day) – 3.50%
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One-year fixed rate ISA
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Leeds BS – 1.45%
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Coventry BS – 1.00%
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Virgin Money – 4.25%
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One-year fixed rate bond
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Atom Bank – 1.95%
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Union Bank of India (UK) Ltd – 1.40% (payable on maturity)
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SmartSave – 4.17%
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Five-year fixed rate ISA
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United Bank UK* – 2.24% (payable on maturity)
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UBL UK – 1.82% (payable on maturity)
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UBL UK – 4.46% (payable on maturity)
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Five-year fixed rate bond
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Secure Trust Bank – 2.43%
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UBL UK – 2.19% (payable on maturity)
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UBL UK – 4.63% (payable on maturity)
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Top rates (gross) based on a £10,000 deposit, on a 1st of month basis unless specified, for new customers. Higher rates may be available for other levels of deposit. *Now UBL UK. Source: Moneyfacts.co.uk
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Rachel Springall, finance expert at Moneyfacts.co.uk, said: “Consumers who prefer a longer-term fixed ISA will be pleased to see much higher rates when they come off their current deal this year, as the top rate on a five-year fixed ISA is over 2% higher than the equivalent deal in 2018.”
