Cash Isa savings rates begin to tick up

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Interest rates on cash Individual Savings Accounts (Isas) are beginning to rise, bringing a bit of relief for savers.

Returns an average of instant access Isas increased from 0.68% in December to 0.78% in the month of February, according to data provider Moneyfacts.

For the fixed rate Isas at least 18 months, the cost has gone up from 1.38% in December to 1.46% this month.

Savers have until April to use their 2017-18 Isa allowance.
The bank of England tips of the first and most rate increases
The great fall in cash Isa savings

It is, after more than a decade of low interest rates, which have discouraged many people from putting money away.

However, Moneyfacts said that the outlook for savers is now improving.

“The Isa market has reached a turning point, with all the average Isa rates increasing for the second month in a row,” said Charlotte Nelson, a financial expert at Moneyfacts.

He said that the end of the Funding for Lending Scheme for mortgages in January, and the closing of the Term of the Funding system, at the end of February, were the factors of variation.

Both programs allowed banks and building societies to borrow cheaply from the Bank of England, in the sense that it does not have to compete for deposits from the public.

The Bank of England has raised base rates to 0.5% in the month of November, with a maximum of two further increases expected this year.