It’s no secret that cash ISAs are important tools when it comes to building savings pots, yet industry experts are mystified at how few Brits spend time searching for a product with the best interest rates attached to it.
More than 50 per cent of the nation’s savers are largely in the dark when it comes to the rates of return on their ISAs, new research recently revealed. Inaction and apathy levels were also found to be high, as nearly half of those surveyed have never gone in search of a better rate at a rival personal or business bank account provider, and 25 per cent simply decided to go with their current account provider when it came time to select an ISA.
The advantages of gaining access to tax-free savings is prevalent, even though there is a relatively low number of Brits professing to know what the exact ISA allowance is. Despite this, around 50 per cent of savers expressed the intention to deposit at least half their ISA allowance into a product by the April 5 deadline.
Experts say that Brits may need to begin thinking twice when it comes to providers, as a raft of bank and building societies are now offering 3 per cent or more on their cash ISA products. Nationwide, Cheshire Building Society and Santander all offer ISAs above the 3 per cent mark, with Santander leading the pack with its 3.30 per cent offering, while other providers such as Principality and NatWest all offer at least 3 per cent to customers as well.
However, with savers tending to choose convenience over having to constantly switch providers to find the best rates year on year, many consumers might consider taking an ISA with an extended term. A large number of the rates advertised today have introductory bonus rates, reverting to much lower standard rates after the initial 12 months, leading savers to have to choose carefully if they don’t want to have to switch providers after that first year.