Andrew Hagger of Moneycomms.co.uk warns consumers to get ready to find a new home for their ISA balances before their bonus expires and their rate slumps – by more than 85% in some cases.
Looking at the best buy ISA accounts available on the 1st April last year, many of the accounts included a bonus element that accounted for the majority of the rate.
In some ways this has been good for savers in that although savings rates have tumbled over the last six months, the guaranteed bonus element has protected the rate for these ISA customers.
But now as these accounts near their 12 month anniversary, it’s vital that savers make a note to start looking for a new home for their tax free cash before the rates are slashed.
It’s important to make your savings work hard, so monitoring the rates and switching your balance should be high on your to-do list.
The details of the impact it could have on your ISA cash if you fail to switch are alarming as highlighted below:
|Provider||Rate 1 April 2012||Inc 12 month Bonus||Interest on £5640 year 1||When bonus expires rate falls to||Interest on £5640 year 2||Reduction in return|
Calculations: Moneycomms.co.uk 11.02.2013