Nationwide has a launched a five-year fixed rate Isa paying interest of 2 per cent a year.
The building society is shaking up its savings range with a number of new products.
A five-year fixed rate bond will pay gross interest of 1.85 per cent and the provider has hiked rates on several of its other accounts by up to 0.25 per cent.
A one-year fixed rate Isa now pays 0.9 per cent rising to 1.25 per cent for those who lock in for three years.
A one-year fixed rate bond pays 0.75 per cent gross, increasing to 1.1 per cent over three years.
Fixed rate Isa accounts will accept transfers in for customers looking to move their balances from elsewhere, while there are also monthly interest options on all accounts.
Tom Riley, director of savings at Nationwide, said: “With the current tax year ending in just a few weeks, those looking to make the most of their tax-free savings have a short time before they lose this year’s tax-free allowance.”
It comes at a time when savers are turning away from cash products in their droves. Cash Isa savings with high street banks fell 4.3 per cent in the year to December 2017 to £157bn as savers switched to easy-access accounts and fixed-term bonds, according to figures from UK Finance.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “Savers have been put off by the rock-bottom rates available from high street banks, but cash Isas remain a serious consideration – if there’s any possibility your income will rise, interest rates increase or government policy evolves then sheltering your savings permanently from tax is well worth consideration.”
