Barclays ISA deal hits top two spot
Andrew Hagger of Moneynet.co.uk looks at the latest developments in the savings market. For the fourth year in succession, the ISA offering from Barclays is riding high in the best buy charts.
The latest account is paying a very competitive 3.10% AER and currently sits in second place behind the 3.50% offer from Santander, with both accounts paying a higher rate than the best 1 year fixed rate ISAs.
The Barclays ISA Golden ISA issue 2 allows instant penalty free access and is a variable rate savings product, including a 1% bonus for the first 12 months.
The ISA market is really taking shape as we approach the annual hot bed of activity as providers look to lure savers yet to make their move in the current tax year, as well as those who'll be quick off the mark when the 2010/11 tax year kicks off on 6th April.
This is a familiar pattern with most of the best deals appearing in the three month window from March to the end of May, before the competition dwindles and some of the best rates peter out.
Whilst Santander and Barclays are top of the pile at present, both offers don't allow transfers in, so those looking for a better deal on their existing ISA balances will be disappointed to have been frozen out.
Last week Clydesdale Bank and Yorkshire Bank launched a new five year fixed rate ISA paying a market leading 5%. Whilst the rate is a best buy, there is a slight downside in that there's no monthly or annual interest option, as a result you have to wait a full five years to receive your interest.
Leeds Building Society is paying a slightly lower rate of 4.60% over the same period, however during the five year lifespan of the ISA you have the additional flexibility of penalty free access to 25% of your capital.
It was disappointing, although somewhat inevitable that a couple of the fixed rate best buys have been withdrawn. The 3.33% one year offer from Bank of Cyprus UK and 3.60% from Aldermore were both pulled during the latter part of last week.
There are still a good number of competitively priced products to choose from, but it's important to look beyond the headline rate and to check that the terms and conditions of the account are right for you.