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New fixed-rate cash Isas push returns up by a fifth since January

UBL has launched a range of market leading fixed-rate cash Isas - PA
UBL has launched a range of market leading fixed-rate cash Isas - PA

The rates on the top fixed cash Isas have increased by as much as 21pc since January, analysis by Telegraph Money shows. New market-leading accounts from United Bank Limited have widened the gap between the best rates six months ago and today.

The new Isas from UBL, formed from the merger of two Pakistani banks, are fixed for terms of two, three and five years and pay 1.36pc, 1.44pc and 1.93pc respectively.

Accounts can be opened in one of six branches or by post with a minimum balance of £2,000. The bank also accepts old Isa transfers.

In January the best rates were 1.2pc, 1.25pc and 1.6pc on accounts of the same terms so the new UBL accounts pay 13pc, 15pc and 21pc more.

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The top rates on one-year cash Isas have also improved. At the start of the year Bank of Cyprus UK offered 1.05pc whereas savers can now earn 1.16pc with Charter Savings Bank.

Average Isa rates are also moving in the right direction.

• Reader Service: Choose Telegraph Investor for fast, efficient online dealing in ISAs, SIPPS and Trading accounts. Capital at risk

The average one-year Isa now pays 1pc, according to the Bank of England. In January the average rate was 0.89pc so there has been a 12pc increase.

Two-year Isas have also improved, although unusually the average rate is less than that on one-year Isas.

The average two-year Isa offers 0.91pc - 11pc more than at the start of the year.

Tom Adams from Savings Champion, the savings advice service, said the new accounts from UBL were "in keeping with the general trend so far in 2017" .

Mr Adams credited new banks with pushing rates up and driving competition.

He said: "Hopefully this trend will continue for the rest of the year and beyond and we see even better rates being launched. As long as these banks need the deposits and are willing to compete for savers’ money, there is every chance that this could happen."

See here for the top fixed-rate Isas and variable-rate Isas.

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