Savers should be wary of instant access cash ISA bonuses in the run-up to the end of the tax year, warns Investec Save.
Its analysis found that four of the top 10 paying accounts rely on bonuses of up to 1.76%.
In total, 15 instant access cash ISAs pay bonuses, with four of those in the top 10 and a further eight in the top 50. A further two accounts rank within the top 100 and one is ranked outside of the top 100.
The average rate at the 10 highest-paying instant access cash ISA accounts is currently 4.18%. However, the top three paying accounts rely on bonuses that run out after a year.
Bonuses paid range from 0.73% to 1.76% among the top 10 but can be as high as 3% a year from instant access cash ISA accounts in the top 50.
Investec Save’s analysis found that the gap between accounts is just over 4% a year, with the highest account paying 4.33% and the lowest paying 0.25%.
David Hunt, head of deposits at Investec, said: “Cash ISA savers need to be wary when choosing how to make the most of their tax-free saving allowance. Bonuses are increasingly being used to attract deposits in the cash ISA market as the clock ticks down on the £20,000 limit.
“It is a crucial part of shopping around in the cash ISA market to look out for bonus rates and to ensure that money is moved when the rate runs out. Even more importantly, savers should ensure they are receiving a comprehensive rate as there are huge variations between the highest and lowest paying accounts.”
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