Trading 212 is offering a market-leading easy access Cash ISA with a five percent interest rate.
Cash ISAs are a popular savings option, as these accounts enable people’s money to grow without having to pay tax on the interest above the Personal Savings Allowance (PSA).
Easy access ISAs provide the same tax benefits but offer the flexibility to withdraw money without penalties. This feature is particularly useful during periods of high living costs when funds may need to be readily accessible.
There is no minimum investment amount to launch Trading 212’s account and interest is applied to the balance daily.
Despite being offered by a trading platform, the Cash ISA will function as expected, with funds securely held in a segregated account and protected by the Financial Services Compensation Scheme (FSCS) up to £85,000.
The deal has previously been praised as a “great choice” by the money comparison site Moneyfactscompare, due to its interest rate significantly beating the average (3.31 percent) for savings accounts in this category.
Also writing about the account in a previous newsletter, the Money Saving Expert team described the deal as the “best” savings rate on offer.
However, competition within the market remains strong. Plum’s Cash ISA offers an Annual Equivalent Rate (AER) of 4.92 percent. The interest is tiered: three percent is paid on balances from £1, while 4.92 percent is paid on balances from £100 and above. Interest is paid monthly and up to three withdrawals are permitted before a lower rate is applied.
Meanwhile, Marsden Building Society offers more flexibility with its Online Cash ISA (Issue Four) boasting an AER of 4.85 percent. Savers need a minimum deposit of £5,000 to get started and interest is paid yearly. There are no limits to withdrawals.
Derence Lee, chief finance officer at Shepherds Friendly, said: “Saving money can be a challenge for many of us, particularly due to increases in the cost of living. Using ISAs to your advantage can be a great way of building savings in the long term.”
“A painless way to save small amounts that add up over time is to use round-up saving tools. Many banks and financial apps offer round-up features that automatically round up your purchases to the nearest pound and transfer the difference to your savings account or ISA.”
Additionally, he suggested: “You can split your annual ISA allowance between different types of ISAs. For example, you might put some money in a Cash ISA for security and easy access, and the rest in a Stocks and Shares ISA for potential growth over a longer period of time.”
For those looking for a new way to save some cash, we round up the top-rate savings accounts every week, from easy access to Cash ISAs.
