Moneyfacts reveals the best Cash ISA deals (Image: Getty)
The “best” Cash ISA deals of the week have been revealed, with interest rates up to 4.75%. Savers have been urged to consider more deals from challenger banks, which tend to offer more competitive returns than the larger high street banks.
Moneybox’s Easy Access ISA offers the top AER at 4.75%. Savers must deposit a minimum of £500 to open the account and can make up to three withdrawals per 12 months without affecting their rate.
At the time of writing, Moneybox’s offer compares with Secure Trust Bank’s two-year fix at 4.72% and a minimum investment of £1,000. Plum’s Easy Access ISA offers 4.60%, and it can be opened with just £1. Vanquis Bank has a 4.66% one year-fix and Close Brothers Savings has a five-year fix, offering 4.71% on a minimum £10,000 deposit, according to Moneyfacts. All rates are AER.
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Easy access accounts work well for savers who may need to dip into their funds from time to time, as these accounts typically offer penalty-free withdrawals. However, it’s key to check the terms, as some may impose limits.
Fixed-rate accounts offer greater certainty for savings, locking in interest rates for specific periods. However, these ISAs typically charge a penalty for early withdrawals.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said smaller banks entering the market can offer “exceptional returns”.
She told the Express: “Cash ISAs are a safe haven for savers who want to protect their hard-earned cash from tax, but it doesn’t always pay to remain loyal to one provider.
“Not every provider will work hard to entice new business, but challenger banks and building societies tend to improve rates more frequently within the top rate ISA tables.”
The expert added: “Challenger banks can offer some exceptional returns on savings accounts if they need to increase deposits for future lending, but deals can change quickly.”
Ms Springall said there are also building societies to consider, and these can offer a fair and consistent return. She added: “But it’s important to review ISAs every few months if the rate is not fixed.
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“The best account isn’t always the one with the highest rate. Accessibility also matters, so savers who want to move their money regularly without penalty would be wise to compare deals that allow unlimited withdrawals.”
Key features of Secure Trust Bank’s two-year Cash ISA include a fixed maturity date of July 3, 2028. Transfers in from other providers are permitted, but they must be whole if made in the current tax year.
This account does not accept transfers from Stocks and Shares ISAs. It can be managed via app, phone, or internet banking, with a minimum deposit of £1,000 required within 30 days of opening. Each deposit must be at least £1,000, too.
Plum’s easy-access Cash ISA rate includes a variable 2.06% AER bonus for the first 12 months, provided the account is retained for a year and other conditions are met. After a year, the rate drops to 2.54% AER, also variable.
Close Brothers Savings’ five-year Cash ISA fix can be managed online. A closure fee would apply if you want to make a withdrawal after 14 days of opening. You would also have to take out the full amount.
Vanquis Bank’s flexible Cash ISA allows withdrawals, but you will incur an exit fee equal to 90 days’ worth of interest.