ISAsMar 8 2018

Skipton launches Isa and raises bond rates

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Skipton launches Isa and raises bond rates

Skipton has launched an 18-month Isa aimed at savers who are undecided between one- or two-year deals.

The new product comes with a fixed rate of 1.25 per cent.

Customers can deposit the annual Isa limit of £20,000 into Skipton’s Fixed Rate Isas and are also able to transfer in previous years' Isa allowances if they wish, but this must be completed by the end of tax year on 5 April. 

Kris Brewster, head of products at Skipton, said: "We’re delighted to introduce an 18-month fixed rate Isa at 1.25 per cent, giving savers a wider range of choice so they can take full advantage of tax free savings over a period of time which suits them best."

The new product is part of an updated range of Isas and bonds launched by Skipton on Thursday (8 March).

The building society has increased rates on its two-, three- and five-year fixed Isas, which now offer a rate of 1.45 per cent, 1.60 per cent and 2 per cent respectively.

Skipton’s Fixed Rate Bonds will also see their rates increase to 1 per cent on the one-year fixed term product, 1.30 per cent for two-years, 1.45 per cent for three-years and 1.80 per cent for five-years.

Kusal Ariyawansa, chartered financial planner at Manchester-based Appleton Gerrard, said: "These are pointless gimmicks given inflation is around 2.5 times the rate of interest.

"Savers can't withdraw partial amounts, only the full amount by closing the account at the cost of 150 days' interest. With such low levels of interest, savers are bound to lose money in real terms meaning these need to be seen as emergency funds alone.

"Anything above this critical level should be directed elsewhere in line with your financial goals and risk capacity."