253% jump in easy access savings rates

Easy access savings and cash ISA interest rates are now far higher than those offered by accounts launched earlier than 2010. So with such high returns on offer, could it be time to get saving?

It’s easy to get down in the dumps if you’re a saver nowadays. Interest rates have been low for the past few years while prices have been rocketing – not a good combination! But if new research is to be believed, it’s not actually as bad you may think.

Figures put out by Defaqto show that the average interest rates paid by easy access savings accounts and cash ISAs launched in 2011 are actually far higher than those launched before 2010.

So let's take a closer look at the figures...

Easy access savings

Believe it or not, newly launched easy access savings accounts pay an average of 253% more interest than accounts released pre-2010.

The stats are based on a £1,000 balance in accounts available to new customers and show that the average interest rate for accounts launched in 2011 currently stands at 2.26%. In comparison, the average rate for accounts launched before 2010 was a measly 0.64%.

What this clearly shows is that loyalty really doesn’t pay. So if you’ve been with one savings provider for a while now – it’s probably time to change.

Take a look at this table detailing some of the best easy access savings accounts around at the moment:

As you can see, the Nationwide MySave Online Account leads the way with a 3.05% AER return. But it’s worth pointing out that this account only allows one penalty-free withdrawal each year. Further withdrawals are subject to a loss of bonus (1.51%) and a lower interest rate of 0.10% in the month the withdrawal was made. You’ll also have to deposit a minimum of £1,000 to be eligible for this account.

The minimum deposit for the second highest-paying account, the Santander eSaver, is just £1 and you’re allowed unlimited access to your cash. This may be a better option than the Nationwide account if you’re not confident that you’ll only need one withdrawal. However, you should note that the bonus rate of 2.50% on the Santander eSaver is variable, so in theory it could change at any time.

And as you may have noticed, most of the above accounts include a 12 month bonus or 12 month interest rate guarantee. This means that when your first year of saving is up, your rate will probably plummet and you should look at changing deals again.

Easy access Cash ISAs

Defaqto also found similar results when it looked at easy access cash ISA rates now, compared with those prior to 2010. New cash ISA accounts now pay on average 85% more interest than those launched pre-2010.

The average rate for 2011 cash ISAs currently stands at 2.43% - prior to 2010 it was just 1.31%.

Here are some of the best easy access cash ISAs around at the moment:

After its interest rate hikes last week, Santander is leading the ‘ISA season’ pack with its Loyalty Flexible ISA. To be eligible, however, you will have to already hold a Santander current account and pay in £1,000 every month or hold a Santander mortgage or investment. If you don’t hold any of these products you can still get your hands on this higher loyalty rate by switching your main current account to the Spanish bank and paying in £1,000 every month.

Alternatively, the AA Internet Access ISA pays 3.35% and you will need £500 to open it.

But if you’re planning on shifting the balance from an existing ISA to a new account then these deals won’t be for you, as neither of them accepts transfers.

The best cash ISA that does allow transfers in is the Halifax Direct Reward ISA. However, you will need to be a current account holder if you want to get the best rate of 3.20%, otherwise the rate drops to 3%.

Similarly, you will need to be a current account holder if you want to open the Nationwide e-Saver, paying 3.10%.

With the 5 April deadline for using up your ISA limits approaching quickly, you’ll need to get your skates on if you want to take out an ISA using your remaining allowance from this financial year.

To find out more about ISA allowances, ISA season and other higher paying fixed rate ISA deals read There’s 12 days left to save £££.

It’s also worth pointing out that there are a few great deals for savers currently lurking about in the current accounts market. Santander is offering 5% on balances up to £2,500 on its Preferred Account and Halifax currently has a cracking £5 per month cashback deal on its Reward Account. But as is always the case, you’ll have to jump through a few hoops if you want to take advantage of these offers – head to Five ways you lose money in bed to find out more.

More: Earn 7.6% on your savings without going near a bank | The seven worst savings mistakes! | Six steps to saving big