A new Cash ISA has hit the market with a competitive 4.5% interest rate fixed for one year. Hargreaves Lansdown (HL) described its latest product as “market-leading” in an announcement made on Tuesday (March 24).
Mark Hicks, HL’s Director of Active Savings, said in a statement: “With less than two weeks of the current tax year remaining, demand for ISA products in the UK is rising sharply, particularly with proposed changes to Cash ISA allowances set to take effect in April 2027.
“Anyone looking to maximise their Cash ISA allowance this year may wish to act soon, with several highly competitive rates still available and time to lock in those rates before April 6.”
The current tax year ends on April 5. The Cash ISA limit will drop to £12,000 a year from April 2027, but not for anyone aged 65 or over. The current £20,000 Cash ISA limit will still apply for them.
For Stocks and Shares ISAs, the annual contribution limit remains £20,000.
Mr Hicks said the growing popularity of Cash ISAs has pushed rates above those of comparable non-ISA savings products.
The expert said high street banks have been offering more attractive returns to draw deposits amid strong demand from savers.
He added: “Our market-leading three and five year fixed-term products provide significantly higher returns than their non-ISA equivalents, with rates of up to 4.50%.”
HL’s savings chief said the broker’s “market-leading” fixed-term products offer savers the chance to lock in guaranteed returns for 12 months or more.
Mr Hicks said: “In an uncertain environment, fixing rates provides greater stability and clarity over future returns, giving savers a strong incentive to include fixed-term products as part of their overall strategy.”
Rates on fixed term accounts have risen since the US and Israel attacked Iran on February 28, prompting retaliatory airstrikes and the blocking of the Strait of Hormuz, through which 20% of the world’s oil and gas flows.
Expectations around interest rates shifted swiftly in the wake of the attacks. Before the war, the Bank of England was expected to lower interest rates, but it held base rate at 3.75% at last week’s rate-setting meeting as the risk of inflation emerged.
Banks and building societies have responded by upping the rates on savings products, prompting experts to urge savers to check what they are currently getting and shop around for better deals.