Top cash Isas now pay 2.75%

By SYLVIA MORRIS, THIS IS MONEY AND DAILY MAIL SAVINGS EXPERT
Updated: 20:15 EST, 9 February 2010

New cash Isa accounts are offering savers up to 2.75 pc fixed for 18 months.

First Direct pays this rate until August next year on its internet-based cash e-Isa, minimum £1. It also offers easy access to your money without penalty during the term.

With Marks & Spencer's Flexi Cash Isa, you earn 2.65pc tax-free, including a 1.25 percentage point bonus for 18 months.

Minimum investment is £100 or £50 a month. You can transfer your cash Isa from other providers into both the M&S and First Direct account. But neither will allow their existing cash Isa savers to move into these better-paying accounts. First Direct pays as little as 0.2pc.

M&S pays 0.5pc on its Tracker Cash Isa, closed to new savers, and 2.5 pc on its Advantage Isa, including a 1 point bonus payable until July 31.

Both M&S and First Direct are owned by HSBC. M&S has its own Financial Services Authority licence, so you have £50,000 of cover under the Financial Services Compensation Scheme with M&S and a further £50,000 with HSBC.

First Direct shares its licence with HSBC, so you have £50,000 of cover split between both banks.

• Savers in Halifax Guaranteed Saver can triple their interest rate by switching to another Halifax account. The latest offer on Guaranteed Saver Reward pays 1.2pc after tax (1.5pc), compared with the 0.4pc (0.5pc) paid by Guaranteed Saver.

It is guaranteed to be at least 1 percentage point above the standard Halifax Guaranteed Saver rate for a year. Both accounts offer unrestricted access.

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