Isa hall of shame: Britain’s worst funds accounts
More than 100 cash Isas pay less than 0.5pc. We name and shame the worst, which include TSB and Barclays accounts 
Barclays’ cash Isa paying 0.1pc would accrue interest of just £5.76 a year on this year’s allowance of £5,760
Photo: Alamy
Banks and building societies have no excuse for paying less than the 0.5pc Bank Rate. But sadly many take advantage of their customers by cutting rates to far less than this.
In some cases, cash sitting in old accounts are earning just 0.05pc.
We have put together a ‘hall of shame’ of the worst easy access cash Isa provided today, enlisting the help of Savings Champion, the rate-monitoring website. Some of Britain’s biggest banks make the list, including TSB and Barclays.
The TSB accounts, which were originally offered by C&G, which was part of Lloyds, now pay just 0.05pc. They are now closed to new savers. Barclays pays a marginally higher rate of 0.1pc on its cash Isa. On this year’s Isa allowance of £5,760, savers would earn just £2.88 and £5.76, respectively.
By contrast, the best easy access cash Isa on the market is Hanley Economic’s 60-day notice account , paying 1.85pc. Savers would earn £106.56 by putting this year’s allowance in the account.
Related Articles
-
‘If I save into a fixed-rate Isa next month, can I use the £15,000 allowance in July?’
26 Mar 2014
-
New £15,000 Isas: all your questions answered
26 Mar 2014
-
With 3 days to go, here are the best cash Isas
02 Apr 2014
-
When switching your cash Isa is a mistake
24 Mar 2014
• Read our comprensive list of the best cash Isas here – ‘ Beat the deadline with these cash Isas’
Although interest rates have dropped in recent years some Isa accounts have remained competitive, and now offer higher rates than a number of current best buys. “Better still, some of these accounts still allow funds to be added”, Susan Hannums of SavingsChampion.co.uk said.
For instance, the Buckinghamshire Building Society’s 180 Day Notice Monthly Income variable rate cash Isa pays 2.82pc Its Gold Rush 120 Day Notice Isa which pays high rate of 3.32pc (on a minimum of £50,000) for its existing savers.
Barclays’ Freestyle Cash Isa pays a rate of 2.76pc.
With this in mind, some savers are best staying put if their provider pays a decent rate. According to SavingChampion’s figures, 28pc of all existing variable rate cash Isas pay more than 1.85pc – the current market-leading rate.
Susan Hannums said: “Traditionally those accounts now closed to new customers pay some of the worst returns on the market, and this is still the case for many savers. However, in these unusual times as best buy rates have tumbled, some savers may in fact be lucky enough to hold accounts now paying well over and above the best rates currently available.
“So don’t just top up your existing account – first check what rate you’re getting. If its uncompetitive then switch but if it is competitive, try topping up your existing Isa rather than opting for the latest best buy.
“Of course you’ll need to check the terms and conditions first to make sure this is possible”, Ms Hannums added
Isa Hall of Shame
Source: SavingsChampion.co.uk