More money flowed into cash ISA at the end of the last tax year, new figures from the Bank of England confirmed today.
According to the bank’s latest money flows update, retail deposits rose by £8.5 billion in March, the most since October 2022 but at £3.2 billion by far the biggest chunk went into cash ISAs.
There was good news for the economy as March saw private non-financial corporations raise £10.2 billion of finance from banks and capital markets, the largest amount since May 2020 with £8.0 billion of net bond issuance.
Mark Hicks, head of Active Savings, Hargreaves Lansdown said: “The cash ISA season surge drove £3.2 billion into these accounts, as savers protected their cash from ever-increasing tax bills.
“Meanwhile, over in the savings market, the dominance of easy access savings accounts made way for the return of the fixed rate account.
“The fact savers can still make 5% or more in accounts fixed for one or two years, and that rates are widely expected to fall later this year are persuading more savers that now is the time to lock their cash away and secure a guaranteed rate.
“The yield curve has moved substantially in recent weeks, so rate cuts aren’t expected until the summer, and even then, there may only be two or three cuts on the way.
“This means we’ve seen strong fixed savings accounts stick around, so if you’re considering a fix it’s worth shopping around with smaller banks and cash savings platforms, where you can still find some rates over 5% over one and two years.”