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ISAs proving most profitable for the nation’s savers

by LLP Finance Reporter
2nd Mar 23 5:24 pm

Analysis by peer to peer real estate investment platform, easyMoney, has found that, while all main avenues available to the nation’s savers enjoyed an above average performance in 2022, it’s ISAs that have performed the best, with the fixed rate ISA posting the best return rates on average over the last decade, while the Innovative Finance ISA currently offers by far the strongest rates available to investors.

easyMoney analysed the average rate of return seen both annually, and over the last decade, across an instant access savings account, a one year fixed rate bond, a variable cash ISA and a one year fixed rate ISA.

In terms of the average annual rate of return seen in 2022, the fixed rate ISA offered the best avenue for savers looking to maximise their nest egg, with an average interest rate of 1.88%, followed by a fixed rate bond (1.59%), a variable cash ISA (0.92%) and finally the instant access savers account (0.52%).

On an annual basis, the fixed rate ISA has also posted the strongest performance in terms of the increase in the average interest rate available to savers. In the last year, following a string of base rate increases from the Bank of England, the average interest rate for a 1 year fixed rate ISA has climbed by 1.51%.

The analysis by easyMoney also shows that over the last decade, the fixed rate ISA has also proved the strongest avenue for savers, seeing an average interest rate to the tune of 1.25%.

The variable rate cash ISA has also proved fairly lucrative, with an average interest rate of 0.79% seen over the last decade, whilst seeing a 0.72% increase in the last year alone, with just fixed rate bonds posting a better performance.

However, while relatively new to the market, analysis by easyMoney shows that it’s the Innovative Finance ISA that could prove the best investment in both the current climate and moving forward.

An analysis by easyMoney of 32 IFISAs currently available to investors today found that the average rate available sits at 7.35%, far higher than the current average seen across the other products analysed.

Jason Ferrando, CEO of easyMoney said, “The Bank of England’s aggressive approach to managing interest rates over the last year has come with a silver lining for the nation’s savers, as the rates available across the most common savings products have all climbed above the average benchmark seen over the last decade.

But for those currently sat on the fence as to where to place their hard earned cash, it could be well worth looking into the range of ISAs available ahead of April’s tax year deadline.

There are a number of products to suit individual investor needs and opting for an ISA doesn’t always require locking up your money and throwing away the key for a pre-agreed period of time.

For those who value a more flexible investment, an Innovative Finance ISA provides the option to transfer in an existing ISA, withdraw your cash at any time and take advantage of a far more promising rate of return.

We’re yet to see other more traditional savings avenues pass on these higher rates to the consumer and just this year, easyMoney have already announced a 0.5% hike in our investor target returns to reflect the current interest rate environment.”

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