Saga’s new fixed-rate ISA, at 3.6%, is the best return available for one year. However, its restrictions seem to be inexplicably self-defeating.
The over-50s savings provider does not allow inbound transfers of existing ISA savings, limitating the amount that can be deposited to £5,340 (or £5,640 in the new tax year).
While this has been a criticism of several higher instant-access products, including the Cheshire Building Society Direct Cash ISA and the AA Access ISA, this move by Saga seems all the more nonsensical because of the likelihood that more of its customer base will have existing ISA savings elsewhere.
Furthermore, if senior savers have already contributed to an existing cash ISA this year, they will not be able to open or contribute to a new ISA until the new tax year.
Saga does allow inbound transfers on its instant-access ISA saver Issue 3, which offers 2.70% AER, with an 18-month bonus of 1.10%. However, this still pales compared to the 18-month rates of 3.50% and 3.10% offered by the Cheshire and Nationwide respectively.
Those who are content to lock away funds for this 18-month period, moreover, might instead consider the Cheshire’s 18-month fixed-rate ISA at 4.00%, or the little-known Progressive Building Society 2-year fixed-rate ISA at 3.75% which does allow inbound transfers.
For more on ISAs, see Which4U's latest savings guides and our Finance Blog. Be sure to make the most of your savings as the new tax year appraoches and sign-up for your new cash ISA through Which4U.