Is your current ISA still competitive?

Staying with the same Cash ISA could be an expensive mistake with many long standing accounts paying poor rates of interest. Defaqto urges consumers to avoid inertia and check whether their current ISA is still competitive.

David Black, Banking Specialist at Defaqto said: "Some Cash ISAs pay as little as 0.10% and this would result in annual interest of only £3.60 for a £3,600 balance. If you switch a £3,600 balance from an ISA paying 0.10% to the highest paying ISA at 5.00% you would get an additional £173 annual interest. If the balance was £5,100 the additional interest over the year would be £249.

Mr Black continued: "Many banks and building societies ‘bulk up' their ISA offerings at this time of year to grab market share. In many cases the best variable interest rates will be from newly launched accounts with some sort of guarantee or introductory bonus. Consumers should check the rates on their existing Cash ISA. If it's not competitive they should think about switching. Currently 87% of Cash ISAs accept transfers in from other Cash ISA providers.

Mr Black advised: "It can be confusing at this time of year with so many ISA advertising campaigns running. In addition to the rate offered consumers should check the type of ISA and the minimum balance required to ensure it meets their investment needs."