The little-known financial institution rule that might value you tons of. Even the savviest savers get stung by this error… be sure to aren’t one: SYLVIA MORRIS

On Jun 10, 2025

Updated: 11:53, 10 June 2025

There’s one simple mistake that even the savviest of savers make. Although it’s completely understandable, it can cost you hundreds of pounds in lost interest.

It’s all too tempting when a fixed-rate cash Isa comes to the end of its term to fix again with the same provider, rather than shopping around and comparing rates.

I know this saves time – you just have to contact your provider and tell them you want to roll over. But several lenders offering top one-year fixed rates a year ago will give you a much less enticing rate now.

Halifax and Lloyds, two of the largest cash Isa providers, paid 4.35 pc this time last year – not a top rate but a decent one available on the High Street. Their rate on offer now is just a lousy 3.6 pc.

Co-op Bank and Skipton are worse. A year ago Co-op offered 4.65 pc, now that rate is down to 3.62 pc while Skipton offers 3.65 pc, down from 4.5 pc last year.

Barclays pays 3.8 pc, down from 4.4 pc and Yorkshire BS 3.75 pc, down from 4.45 pc. Nottingham BS’s rate was 4.66 pc online a year ago and now just 3.75 pc. Tesco Bank, now part of Barclays, is down from 4.45 pc to 3.95pc. I wouldn’t settle for anything below 4.25 pc on a cash Isa online. Plenty pay this or slightly more including Virgin Money on 4.27 pc.

Several lenders offering top one-year fixed rates a year ago will give you a much less enticing rate now, says Sylvia Morris

Cynergy, Kent Reliance and Oaknorth Bank offer 4.26 pc along with Hodge Bank, Secure Trust, United Trust Bank and Vida Savings all at 4.25 pc. Paragon Bank pays 4.25 pc fixed for 15 months.

On the High Street you generally earn lower rates but if you live near a Kent Reliance branch, you can fix at 4.26 pc.

Other top rates in branches include Cambridge and Cumberland building societies at 4.15 pc, Leeds BS at 4.12 pc, along with Family BS, Melton BS and Santander at 4.1 pc.

To transfer a cash Isa for a better deal, ask the provider to which you want to move to arrange it. If you do it yourself, you can lose the tax-free status on your money.

It should take a maximum of 15 working days but in practice most transfers go through much more quickly.

An even worse mistake than sticking with your provider is doing nothing. It could dump your cash in a poor-paying easy-access account earning just 1 pc or roll it over for another year at a lousy rate.

Every pound makes a difference now that inflation is eating up a bigger chunk of our interest – at 3.5 pc now compared with 2.3 pc a year ago.

Members get better deals from lenders

Building societies often come out with exclusive deals for members and there are two around that look good right now.

Nationwide is paying 5 pc on its 18-month Members Bond available online or in-branch.

It’s available if you are a member and have been since May 28 or before, with at most £10,000 in savings. This pays out more than £750 for the 18 months.

Saffron BS also has a plan paying an 8 pc fixed rate with its Members’ Monthly Loyalty Saver. It’s available if you have been a member since or before June 1 last year. The most you can put in is £50 a month, which will give you £626 after a year.

But not all these member-only deals look good value. I can’t see why anyone would take out the Scottish BS Member Only Fixed Rate Isa paying 3.9 pc until November 2026. Its ordinary one-year Isa pays a higher 4 pc.