Where are the best paying cash NISA rates? Now that inflation has fallen to the low of 1.5%, it is easier to find a positive real rate of return. But sadly most tax-efficient savings accounts only just beat inflation and according to SavingsChampion.co.uk interest rates on 90 cash ISAs have been cut since March.
In March’s Budget Chancellor George Osborne announced that savers can now shield up to £15,000 a year in a cash ISA from the tax man. This is an increase of more than £10,000 and as well as being bigger this New ISA or NISA also has greater flexibility. While you could always transfer cash ISA savings into a stocks and shares ISA, you can now reverse this – transferring a stocks and shares ISA pots into a cash ISA.
This does ring alarm bells however, because while stock markets are rallying, people are confident, but what happens when investors inevitably face another loss, when the markets start to go down?
The danger is that investors get scared and move their money into cash on a market downturn. But according to Bank of England Governor Mark Carney , cash is unlikely to yield much of a return for quite some time. Carney indicated that interest rates would rise at the end of this year in June, with economists predicting rises of 25 basis points every three months. Carney suggested that the “new normal” for interest rates would be 2.5%, like to be reached by early 2017.
This compares dismally to the 8% available on cash savings accounts available just seven years ago. Savers must be vigilant in order to get their cash to work as hard as possible for them. Seek out the best paying accounts, and transfer your cash savings into the most competitive payer. We detail the best paying NISAs around below.
