Yorkshire Building Society launches cash ISA offering 'competitive return' ahead of tax free allowance cut

Temie Laleye
Thu, 02 Apr 2026 14:02:54 +0000

Yorkshire Building Society has bolstered its tax-free savings offerings just days before the current tax year concludes on April 5.

The timing proves significant for savers seeking to utilise their full allowance ahead of substantial changes to ISA rules taking effect from April 2027.

The mutual lender unveiled a fresh Online Cash ISA paying 4.05 per cent with no restrictions on withdrawals, alongside improved rates across its fixed-term ISA products.

Those aged under 65 will face reduced limits for cash deposits, making the current window particularly valuable for maximising tax-free returns.

From the 2027/28 tax year, the current £20,000 annual ISA allowance will effectively shrink for many savers.

Under the new rules, only £12,000 will be permitted for deposits into cash ISAs and similar products.

The remaining £8,000 must be directed towards investment-based ISAs instead.

This restructuring means savers have limited time to take full advantage of existing limits before the changes come into force.

With just three days remaining until the April 5 deadline, both Yorkshire Building Society and other providers are encouraging customers to review their positions and deposit funds while the more generous allowance remains available.

Yorkshire Building Society's new Online Cash ISA combines the benefits of a fixed one-year term with complete flexibility on withdrawals, available to anyone aged 18 or over with just £1 to deposit.

The account operates exclusively through digital channels and permits transfers from existing ISAs, with interest paid annually upon the account's first anniversary.

The society has simultaneously raised rates on its Fixed Rate ISA range, now accessible through branches, agencies, online platforms and its mobile application.

The one-year fixed product now pays 4.31 per cent until May 2027, up from 4.20 per cent, while the two-year option increased to 4.25 per cent from 4.10 per cent, and the three-year ISA rose to 4.20 per cent.

Nationwide has also entered the fray with enhanced ISA rates this week, withdrawing all previous offerings and introducing a fresh lineup.

The building society now leads the market for three and five-year cash ISAs, both paying 4.5 per cent.

Its one-year fixed rate ISA offers 4.35 per cent, surpassing most high street rivals, though HSBC matches the longer-term rate for existing current account customers only.

The two-year product pays 4.4 per cent, narrowly beaten by Furness Building Society's 4.5 per cent offering.

Anna Bowes, savings expert at The Private Office, described the new rates as "very competitive" and welcomed seeing a familiar high street name featuring prominently in best buy tables.

"More savers are choosing to manage their finances digitally, and our new 1 Year Online Cash ISA has been designed with that in mind," said Tina Hughes, director of savings at Yorkshire Building Society.

"It offers the reassurance of a fixed-term product while still giving customers the flexibility of unlimited access, which is something we know many people value."

Richard Stocker, Head of Savings at Nationwide, emphasised the society's commitment to accessibility: "We're pleased to launch new higher rates across our ISA and Bond range with both short- and longer-term options. All ISAs and rates are available in branch, by phone or online, as we know customers value choice in how they bank."