Halifax Building Society ISA

Halifax has bumped up the interest paid on its one-year fixed-rate cash Isa

Halifax has bumped up the interest paid on its one-year fixed-rate cash Isa for new savers from 1.4 per cent to 1.6 per cent.

For weeks, cash Isa savers have been left out in the cold by banks and building societies who’ve put up rates instead on taxable easy-access and fixed-rate bonds.

There are hopes that Halifax’s move will kickstart competition among rivals.

Tesco Bank reacted quickly, raising its rates to 1.75 per cent fixed for a year.

The Halifax rate puts it among the top deals in the High Street, just behind Virgin Money’s 1.71 per cent and Nationwide’s 1.65 per cent.

Those in easy-access cash Isas need to watch their rates. In particular, banks and building societies have been cutting rates on older accounts.

Savers in Barclays Instant Cash Isa Issue 1 need to switch out to a better deal.

Next month your rate on this easy-access account tumbles by nearly 0.5 percentage points to just 0.8 per cent on balances up to £15, 000, 0.9 per cent between £15, 000 and £29, 999 and 1 per cent on £30, 000 or more.

Not all banks and building societies accept transfers from other providers. One top payer, National Savings & Investment Direct Isa at 1.5 per cent, does not.

Best deals for transfers include National Instant Isa Saver issue 3 at 1.4 per cent.

Virgin Money pays a higher 1.51 per cent on its Defined Access Isa, but this limits you to making three withdrawals a year from your capital.

To switch your cash Isa, ask your new provider to arrange the transfer. If you do it yourself you could lose your tax-breaks.