Instant access cash ISA bonus rates are on the increase putting savers at risk of losing out once the bonuses expire, new analysis for Investec Save shows.

The analysis - conducted by Andrew Hagger of Moneycomms for Investec Save - found that five of the top 10 paying instant access cash ISAs rely on bonus rates rising to nine of the top 25 and 12 of the top 50.

Average bonus rates are 1.68% over 12 months but range from 0.49% to as much as 3.16%. In total 14 of the 165 instant access cash ISAs on the market include bonuses.

However, once bonus rates expire the instant access cash ISAs are much less attractive – just two rank in the top 50 and seven drop out of the top 100.
Investec Save recently launched its 1-Year Fixed Rate Cash ISA paying 4.27% AER* -one of the highest rates available of any fixed rate cash ISA accounts.

Bonus rates do not apply in the fixed rate market, meaning you can lock your savings in and not have to worry about any interest rate changes.

David Hunt, Head of Deposits, Investec, said:
“Bonus rates seem attractive on instant access cash ISAs, but the reality is that many savers leave money in accounts when these expire. That could mean losing out as the analysis shows rates on accounts with bonuses drop significantly once the bonus is gone.”

Andrew Hagger of Moneycomms added:
“The use of bonus rates in the cash ISA market is quite commonplace but there is a big downside for consumers who forget to switch. If you don’t remember to move your money upon bonus expiry your cash could be earning as little as 1% in some cases.”

Investec Save’s 1-Year Fixed Rate Cash ISA can be opened with a minimum of £1,000 and customers earn tax-free interest on deposits fixed for one year. They can open multiple 1-Year Fixed Rate Cash ISAs within their UK ISA allowance. ISA transfers into Investec’s new Cash ISA from other providers will be available soon.

For more information on the 1-Year Fixed Rate Cash ISA and the full product summary box, see our webpage at savings.investec.com/fixed-rate-cash-isa. Investec Save’s range of accounts can be opened online in minutes and are fully managed online with no hidden fees or charges.

Investec Save accounts include its Fixed Rate Saver with 1-Year, 2-Year or 3-Year terms available, currently offering 4.10% AER*, 4.05% AER* and 4.05% AER*, respectively. The Fixed Rate Saver provides simplicity and security for savers. Interest is paid on maturity of the 1-Year term and annually on the 2-Year and 3-Year terms. No withdrawals are permitted until the end of the term in each case, and no further deposits can be made after the first seven days.

Its 90-Day Notice Saver, which currently offers 4.17% AER*, offers unlimited deposits with withdrawals subject to 90-days’ notice. This is ideal for those expenses that you can plan for, such as a holiday or wedding.

The Online Flexi Saver, which currently offers 4.00% AER*, is a simple and secure instant access savings account. Unlimited deposits and withdrawals are allowed. This makes the Online Flexi Saver perfect for unexpected expenses that might arise, such as car maintenance or a vet bill.



• * AER stands for the Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once a year. The AER is intended to be an indicative rate to help you compare the return on different savings products.