Banks and building societies are lifting their best buy savings deals as expectations grow that inflation and interest rates will climb, and experts are urging savers to take advantage.
A new study of the top 30 one-year fixed rate cash ISAs shows the average now pays 4.36%, up from 4.03% in February. In total, 21 of the top 30 products have increased their rates, according to Investec Save’s analysis.
David Hunt, head of deposits at Investec Save, said: “The fixed cash ISA market has become more competitive since February, with a clear majority of one-year products increasing their returns.”
It’s still early in the new tax year, and savers should carefully consider where to place their ISA, he said. “A stronger fixed-rate market gives them more scope to lock into an attractive tax-free return for the next 12 months.”
Many will want to max out this year’s Cash ISA allowance, with rules set to change. From April 6, 2027, the Cash ISA allowance for under-65s will fall to £12,000, but remain the same for older savers.
Hunt said today’s economic certainty is a key attraction for fixed-rate products. “Fixing for a year can provide peace of mind while ensuring their money continues to work hard, tax-free.”
Caitlyn Eastell, personal finance analyst at Moneyfactscompare.co.uk, said rising competition has pushed rates higher across the board, but savers will only benefit if they are willing to switch deals. “This presents a valuable opportunity to maximise returns, particularly for those still holding cash in low-paying accounts.”
Cash ISA savers willing to fix for longer can get 4.66% a year for five years from Close Brothers Savings on a minimum £10,000, or 4.58% from United Trust Bank on £5,000 and above.