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Top Isa rates provide boost for savers

Tax free savings accounts at two-year high

Isa rates rise

Isas provide tax-free savings and some two-year accounts are now paying a rate above inflation

Which? research has found that savers could earn more tax-free interest on their money than they could have done in 2010 with the top two-year fixed-rate cash Isa now paying 3.75%.

If you had a two-year fixed-rate cash Isa deal that was about to mature, the maximum you could have earned is 3.5%, that’s if you had secured the best available deal at that time.

Today, if you transfer £10,000 into the best fixed-rate deal, you would earn £54 more than you would have done in the top paying account two years ago thanks to an extra 0.25% of interest.

Isa savers can beat inflation

There is less to choose between the average-paying account of today and two years ago, however, as these rates have remained consistent at around 3.2% since March 2010.

Two-year fixed-rate cash Isa rates 2010-2012
  2010 2011 2012
Leading Best Rate account 3.5% 3.5% 3.75%
Cash Isa market average 3.2% 3.25% 3.25%


The good news for savers is that the best fixed-rates now available on a two-year Isa would produce real returns above inflation, which currently sits at 3.6%, having fluctuated between 4% and 5.2% in 2011.

Transfer your Isa for best rates

If your fixed rate Isa account is about to expire but you want to transfer it to another fixed term deal, check out our Best Rate tables for the best deals and up-to-date rates.

More on this…

Find the best Isa – use our 5 step guide 
Switch your cash Isa – how to transfer funds 
Stocks and shares Isa – an alternative to cash 

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