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Thousands of savers will be rubbing their hands this month as they reap the interest benefits of locking up money.
Savers poured billions of pounds into fixed rate deals this time last year. The most popular accounts – one-year fixes – are nearing the end of their term.
But make sure you don’t take your eye off the ball now, because I fear that thousands will have their money locked up again or – perhaps worse – that their returns will be wiped out in just a few months.
Between one month and two weeks before the end of the bond’s term, your provider must send you a letter asking what you want to happen with your money.
If you don’t make your wishes clear, your money is likely to be dumped into a worthless, easy-to-access account that pays less than 1.5 percent, or your money will be tied up for another year as it is automatically banked . new one-year bond.
Rollover trap: Savers poured billions into fixed-rate deals this time last year. But thousands could find their money dumped into a worthless, easily accessible account, paying less than 1.5%.
NatWest says it will reinvest your money in another bond if you don’t tell it you want your money back at least five days before maturity.
In most cases, the money saved in fixed interest Isas is automatically transferred to an easily accessible account at the end of the term.
This may give you some breathing room, but keep in mind that you will earn a paltry rate while you decide what to do.
This time last year, Santander had a top-paying Isa with a one-year fixed rate of 4.15 per cent, which ran until April 1 or May 1 this year, depending on when you opened it.
You can tell Santander what you want to do with your money up to 28 days before the end date.
But if you don’t tell the bank what you want, your money could end up in the Isa Saver account at an interest rate of just 1.2 per cent.
If you don’t want to commit your money again, you can transfer it to a more accessible account. If you still want a fixed interest rate, you can transfer your money to another provider, where you may earn 5 percent.
On the High Street you can get 4.75 per cent at Leeds or 4.7 per cent at West Bromwich Building Society.
With Halifax, if you don’t make your wishes clear before the end of a fixed interest rate term, your money will end up in the Isa Saver with rates as low as 1.45 per cent up to a maximum of £10,000. A year ago it paid 4.1 percent.
With some providers – including NS&I, Yorkshire, Coventry and Skipton building societies – your fixed-rate savings may be locked in for a new period if you don’t tell them of your wishes.
You then have just a few weeks to receive your money free of charge, which can amount to up to three months of interest on a one-year bond.
A year ago, NS&I paid 4 percent on its one-year guaranteed growth bond. The current version pays 4.15 percent.
At the end of the term you have 30 days to get out. If you miss that window, you won’t be able to get your money out for years to come.
sy.morris@dailymail.co.uk
See the best cash Isa rates in our savings tables