Cash ISA rates rising rapidly

Monday, 06 February 2023 12:00

Bank of England base rate rises have pushed up cash ISA rates

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

Savings market analysis – average rates and top rates
Average savings rates	Feb-18	Feb-22	Feb-23
Easy access ISA	0.78%	0.26%	1.85%
Easy access (non-ISA)	0.48%	0.21%	1.73%
Notice ISA	0.96%	0.37%	2.57%
Notice account (non-ISA)	0.79%	0.53%	2.55%
One-year fixed rate ISA	1.12%	0.60%	3.41%
One-year fixed rate bond	1.19%	0.84%	3.61%
Five-year fixed rate ISA	1.85%	1.40%	3.68%
Five-year fixed rate bond	1.97%	1.51%	4.04%
Average rates (gross) based on a £10,000 deposit on a 1st of month basis. Source: Moneyfacts.co.uk
Top rates	Feb-18	Feb-22	06-Feb-23
Easy access ISA	Virgin Money – 1.21%	Shawbrook Bank – 0.61%	Newcastle BS – 3.05%
Easy access (non-ISA)	RCI Bank UK – 1.30%	Investec Bank plc – 0.71%	Newcastle BS – 3.05%
Notice ISA	Marsden BS (120 day) – 1.30%	Aldermore (30 day) – 0.55%	Loughborough BS (120 day) – 3.05%
Notice account (non-ISA)	Secure Trust Bank (180 day) – 1.65%	Shawbrook Bank (120 day) – 1.08%	Furness BS (120 day) – 3.50%
One-year fixed rate ISA	Leeds BS – 1.45%	Coventry BS – 1.00%	Virgin Money – 4.25%
One-year fixed rate bond	Atom Bank – 1.95%	Union Bank of India (UK) Ltd – 1.40% (payable on maturity)	SmartSave – 4.17%
Five-year fixed rate ISA	United Bank UK* – 2.24% (payable on maturity)	UBL UK – 1.82% (payable on maturity)	UBL UK – 4.46% (payable on maturity)
Five-year fixed rate bond	Secure Trust Bank – 2.43%	UBL UK – 2.19% (payable on maturity)	UBL UK – 4.63% (payable on maturity)
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

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.”