Back to April 2019

Savers seeking secure fixed rate returns in uncertain times

Consumers are favouring fixed rate over instant access ISAs this year, as people look for rate certainty.

Ahead of the current tax year end on Friday (5 April), savers have invested a net £300m more into fixed rate ISAs than instant access ISAs since the start of 2019, according to data from CACI*.

This is the first time since 2015 that savers have deposited more money than they have withdrawn from fixed rate ISAs by this point in the year.

Savers are also investing more into ISAs than they were at this stage of 2017 and 2018, with over £1bn net ISA deposits since the start of the year.

Matt Bartle, Director of Products at Leeds Building Society, said: “There has been a lot of speculation about consumers turning away from the ISA in recent years, particularly following the introduction of the Personal Savings Allowance.

“However, this new data indicates an upsurge in demand for the tax-free product with investment higher than it was in both 2017 and 2018 as we approach the end of the tax year.

“The data also indicates consumer preference has shifted from variable to fixed rate products as they consider the long-term view of their savings. Many are opting for the security of guaranteed rates, as economic and political uncertainty continues and we continue to see strong demand for our fixed rate ISA products.”

The Society has refreshed its ISA range and offers a choice of fixed rate products.

Highlights include:

  • 1.75% Tax-free p.a./AER* Two Year Fixed Rate ISA
  • 2.10% Tax-free p.a./AER* Five Year Fixed Rate ISA

The maximum investment for the current tax year (2018/2019) is £20,000.

Ends

Notes to Editors

* CACI’s Gross Weekly Savings Flows, data from week ending Sunday 6th January to week ending Sunday 24 March.

Tax-free means that interest payable is exempt from income tax.

Ƣ AER stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and added each year.

Leeds Building Society operates throughout the UK and in Gibraltar and has assets of £19.4bn at 31 December 2018 (£18.5bn at 31 December 2017). The Society’s head office has been based in the centre of Leeds since 1886.

Key features

Two Year Fixed Rate ISA (Issue 112)

  • Annual fixed rate of 1.75% tax-freepa/AER*
  • No Withdrawals are permitted
  • If Withdrawal Restrictions Broken, 150 days’ loss of interest
  • Interest is paid annually on 4 May (commencing 4 May 2020) and on maturity (4 May 2021)
  • Interest can be credited to the account, transferred or paid to another account held with the Society
  • Transfers in of previous years’ subscriptions permitted while the product remains open
  • Transfers in from Stocks and Shares ISAs permitted
  • Minimum opening balance £100
  • Maximum investment is £20,000 in 2018/19, plus previous years’ ISA subscriptions
  • Can be opened online, in branch or by post
  • Can be operated in branch or by post

Five Year Fixed Rate ISA (Issue 86)

  • Annual fixed rate of 2.10% tax-freepa/AER*
  • No Withdrawals are permitted
  • If Withdrawal Restrictions Broken, 365 days’ loss of interest
  • Interest is paid annually on 30 April (commencing 30 April 2020) and on maturity (30 April 2024)
  • Interest can be credited to the account, transferred or paid to another account held with the Society
  • Transfers in of previous years’ subscriptions permitted while the product remains open
  • Transfers in from Stocks and Shares ISAs permitted
  • Minimum opening balance £100
  • Maximum investment is £20,000 in 2018/19, plus previous years’ ISA subscriptions
  • Can be opened online, in branch or by post
  • Can be operated in branch or by post