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How to avoid being caught by Isa rate cuts

One in four instant-access accounts cut since February


Interest rates are mooted to rise in a matter of months, but that hasn’t stopped some of Britain’s biggest savings providers from slashing returns on cash Isas.

A Which? Money analysis of 92 Isa accounts has found that 23% of rates have been cut between February and August this year. 

The largest cut we discovered was on Tesco Bank’s Instant Access Cash Isa, where the rate dropped from 1.35% to 0.75% AER, equating to a £90 loss in interest on savings of £15,000.

Only three of the accounts we looked at (Nationwide’s Flexclusive Isa Issue 9 and Instant Isa Saver Issue 3, and Saffron Building Society’s Branch Cash Nisa Issue 2) have increased their rates during the period, with rises of 0.1%, 0.15% and 0.3% AER respectively.

Banks have to write to customers if the interest rate on their account changes, but previous Which? research suggests there are still plenty of savers with funds stuck in sub-standard accounts.

Follow our step-by step guide to avoid getting caught by Isa rate cuts. 

Find out what your savings rate is

Although your savings rate will always appear on your account statement, it can sometimes be difficult to find. 

Our savings rate booster tool provides a quick and easy way to find out what your savings rate is. You’ll also find out whether your savings provider offers a better account and how much interest you’re missing out on compared to the best rates on the market. 

Find out more: Savings rate booster tool – find out how much interest you could be earning

Compare your Isa

If you’re not getting the best savings rate on the market, it’s worth exploring what other deals are available. 

The Which? Money Compare savings and Isa tables let you search hundreds of savings accounts and Isas from providers large and small to find a great savings rate based on quality of service as well as cost and benefits.

Which? Money Compare Table – Savings and Isas – our tables are updated daily 

Switch to a better rate

Although you can only pay new funds into one cash Isa and one stocks and shares Isa per year, you can transfer existing funds between Isas as often as you like, provided your Isa accepts transfers in from other providers.

Isa transfers must be completed via a transfer form from your new provider. The new provider will do all the work to ensure your funds are transferred correctly.

At present, if you withdraw the money yourself then seek to re-invest it, it will be considered as a new deposit and will count towards you annual tax-free allowance for that year.

However, from autumn 2015, you will be able to take out and put money back into your cash Isa without it counting towards your annual tax-free allowance.

Find out more: How to transfer a cash Isa – a step-by-step guide 

Watch out for changes in your savings rate 

If you deposit funds in a fixed-rate Isa, you can be confident your rate will remain the same for the length of the fixed-rate period.

However, if your funds are stored in an instant-access Isa, or in an account where the fixed-rate period has come to an end, your interest rate can fluctuate at any point. 

Keep an eye out for any communications from your bank regarding interest rate changes – and use our new email reminder service Emindme to alert you when the fixed term of your savings account comes to end.

Find out more: Emindme our new email reminder tool    

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Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.

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