Santander launches 4.15pc cash Isa for one-year fix

COMPETITION on cash Isas is heating up as the big banks return to the scene with top rates. Yesterday, Santander launched the best deal on the market — a one-year fixedrate cash Isa at 4.15 pc fixed until April 1 next year.

It is also offering an 18-month version at 4.25 pc and a two-year deal at 4.20 pc. You can open an account online or in a branch with a minimum £500. Savers who transfer at least £10,000 into its fixed-rate Isas from another provider will receive a £50 e-voucher as a bonus.

The bank has also launched a new issue — number 18 — of its online-only e-Isa at a top variable rate of 3.2 pc. But beware, the rate only lasts for a year after which your money is transferred into the bank’s Isa Saver which pays just 0.6 pc.

If your savings are in its current Isa Saver or older issues of e-Isa, which all pay lower rates, you can ask Santander to transfer it into the new one for a better rate.

Banks have been notably absent from the Isa best buys for years while rates languished at lows in the aftermath of the 2008 financial crash.

But many are now waking up to the fact that savers are moving their money around and making use of Isas’ tax-free status as rates are rising. Halifax has also launched new fixed-rate Isas paying 3.9 pc for one year and 4 pc for two years. Both are available online or through its branches.

Smaller banks are joining in, too. Cynergy Bank has raised the rate on its Online Isa issue 32 to 3.2 pc while Marcus Cash Isa rate has risen to 3 pc including a 0.25 point bonus for a year.