Halifax has improved its ISA offering with a better return on its five year fixed rate product.
The ISA now pays 4.4 per cent, strengthening its position as the market leading long term fixed rate ISA.
The product is an excellent option for savers who do not mind their savings being tied up for the five-year period.
However, savers wishing to make an early withdrawal will have to close the account and will lose 365 days’ interest.
A significant advantage of the new product is that transfers in from existing ISAs are accepted.
On Friday, Nationwide building society also launched a new ISA.
The building society announced a new one-year fixed term ISA offering between 3 per cent interest on balances between £1 and £9,999, 3.2 per cent on balances between £25,000 and £49,999, and 3.25 per cent on balances above this amount.
The new ISA replaces Nationwide’s 14-month Fixed Rate ISA which has now been withdrawn.
ISAs have been a great success since they were launched in 1999.
They are now second only to current accounts in terms of popularity, and it is estimated that 40% of UK households have one, with the average ISA balance being £8,505.
The annual limit for investment into an ISA is being increased to £11,280 from April next year, and up to half of this amount can be saved in a cash ISA.
The limit is being raised because of the high inflation figures recorded in September.
This month saw the launch of Junior ISAs, with an annual investment limit of £3,600 for each eligible child.
Children born on or after 3rd January 2011 and children under 18 years of age, born before September 2002, are eligible to take out the Junior ISAs.