Isa that’ll rise if rates go up

SKIPTON BS has launched two attractive accounts that give savers a big boost if the base rate goes up.

The easy-access account and cash Isa, both at 1.02 pc, come with an unusual guarantee to pay 0.52 percentage points over the Bank of England base rate for two years.

This is a pledge not to be sneezed at — not least because the base rate, currently 0.5pc, is expected to rise later this summer.

The last time that happened — when it went up 0.25 percentage points to 0.5 pc in November — the average easy-access account went up by a mere 0.09 points, show figures from the advice website Savings Champion.

In most cases, you had to wait at least three weeks for your measly rise to filter through to your account. With the Skipton Super Tracker and Super Tracker Cash Isa, your rate will go up no more than 14 days after the change.

If the Bank of England announces a rise from 0.5 pc to 0.75 pc on August 2 — the date widely predicted by experts — you will earn the new 1.27 pc from August 16 at the latest.

With most other providers, you’ll have to wait until September 1 at the earliest to benefit.

The Skipton accounts will only suit you if you don’t use your account too often. You can make two withdrawals a year — if you want to make more, you’ll need to close your account. And the tracker guarantee only lasts until June 2020, when you could end up in a poorpaying account. The accounts are on sale online and through the society’s branches, by post or over the phone.

If you are happy with an online account, you’ll earn a higher 1.3pc with RCI Bank Freedom Account or Shawbrook Bank Easy Access 12. But there is no guarantee you will see any increase if base rate rises.

Ford Money pays a lower 1.22pc. Like RCI and Shawbrook, it does not guarantee it will pass on any base rate rise in full. But if it puts up rates for new savers, existing customers will benefit, too. Last year, it raised its rate on savings by an above-average 0.15 percentage points after the November base rate rise.

Often, providers will close their accounts and launch one at a higher rate for new savers, rather than pass on the rise to loyal savers.

If you want to stick to the High Street, you can earn 1.25pc with Kent Reliance Easy Access Issue 27, with no base rate guarantee and no withdrawal restrictions. The Family Building Society, based in Epsom, Surrey, pays 1.11 pc on its Branch Saver Issue 1.

The next best rate is Skipton’s, followed by Virgin Money Easy Access Saver Issue 31 at 1.01pc and Coventry BS Easy Access Saver Issue 5 at 1 pc, both with no withdrawal restrictions or rate guarantee.

If you are in an account with an issue number, check your rate. You could be earning less in an old issue than new savers.