Base rate still 0.50% but cash ISA deals hit 3.00% - take advantage now

Base rate still 0.50% but cash ISA deals hit 3.00% - take advantage now

09 March 2011 / by Nick Scarrett

As the base rate remains at 0.50% for the 24th month running, Nick Scarrett, head of savings and investments at Fair Investment Company urges savers to take advantage of the seasonal cash ISA deals out there.

"The MPC really had little choice; they had to follow the path of least resistance by leaving interest rates unchanged. Yes inflation is well above target, but the risk of a double dip recession is too high and raising rates would be no guarantee that inflation would fall anyway.

"However, while a consistently low base rate usually results in equally low cash ISA rates, at the moment, the opposite is true. This is because we are nearing the end of the tax year; ISA providers are competing for last minute deposits and transfers and it can be worth taking advantage of the competitive rates available.

"Keep in mind though that many ISA providers offer a great rate at the end of the tax year to entice savers in, only to drop it at a future date, so if you picked a high paying ISA rate this time last year, you may find that by now the rate has reduced substantially.

"But you can still take advantage and play the transfer game. If your current ISA rate has dropped, transfer into a better paying account before 5th April. To stay ahead of the game, check to see if the rate has dropped at the end of the fixed rate period and if it has, transfer your ISA cash again next year."