Where do I find the best fixed rates?
NORTHERN Rock has launched a fixed-rate bond paying 2.4pc after tax (3pc before) for one year. The bond, where the rate is fixed until July 1 next year, is available only through the post.
ICICI Bank has also increased the rate on offer on its internet-based Hi-Save account to 2.4 pc (3pc) to new savers willing to tie their money up for 12 months.
They join Post Office, where the deposit-taker is Bank of Ireland, and Barnsley Building Society — now part of Yorkshire BS — in paying this top rate.
If you are willing to tie your money up for two years, you can earn 2.8pc (3.5pc) with Northern Rock but a slightly higher 2.96pc (3.7pc) with ICICI Bank or the Post Office. Halifax pays 2.84 pc (3.55 pc) and Saga — where the deposit taker is Halifax Bank of Scotland (HBOS) — 2.88 pc (3.6 pc)
Top deals on tax-free fixed-rate Isas for one year come from the Post Office, which pays 3 pc tax-free.
But some banks and building societies continue to pay less to Isa savers than on taxable fixed-rate bonds.
Northern Rock pays 2.75 pc fixed for a year on its Isa, against 3 pc on its taxable bond. At Halifax you earn 3 pc fixed for two years on its cash Isa, 0.55 percentage points less than it pays on its similar taxable fixed-rate bond.
Even worse, over three years Halifax offers 3.35 pc on its fixed-rate cash Isa, 0.65 points less than the 4 pc before tax on its taxable bond.
The best two-year fixed-rate Isa comes from Santander at 3.5 pc, but you need a minimum £10,000 to earn this rate. Below this, the rate is 3 pc.