Moneybox has raised the interest rate on its easy access Cash ISA to a market-leading 5.15%, earning an “excellent” Moneyfactscompare rating.
The interest rate includes a 0.45% bonus for 12 months and savers can launch the account with a minimum deposit of £500.
Interest is paid on the anniversary of opening and three withdrawals are allowed per calendar year. A lower interest rate of 0.75% AER (variable) will apply if the account balance is less than £500 or a fourth withdrawal is made.
Commenting on the deal, Caitlyn Eastell, spokesperson at Moneyfactscompare.co.uk, said: “This week, Moneybox has increased the rate on its Moneybox Cash ISA.
“The deal shares the top position in the variable rate ISA market. It now pays an attractive 5.15%, which includes a bonus of 0.45% for the first 12 months, so savers would be wise to review after this period.
“Savers looking for flexibility and instant access to their savings pots may find this an enticing option as withdrawals and further additions are permitted.”
However, Ms Eastell warned: “Savers should note that only three withdrawals can be made per year before a lower rate is paid. Overall, this deal earns an Excellent Moneyfacts product rating.”
Trading 212 joins Moneybox’s deal in the top spot with its easy access Cash ISA, also paying an Annual Equivalent Rate (AER) of 5.15%.
There is no minimum deposit requirement and interest is paid daily. There are also no limits to withdrawals.
Plum’s Cash ISA falls just behind, which pays an AER of 4.92% on deposits over £100. Interest is paid monthly, however, a lower rate will apply if more than three withdrawals are made in one calendar year.
A staggering £42billion has flowed into Cash ISAs this year to date as interest rates and taxes rise, research from AJ Bell shows.
Commenting on the tax-efficient savings tool, Laith Khalaf, head of investment analysis at AJ Bell, said: “Cash ISAs continue their strong run with another £3.9 billion being pumped into these accounts in September. There has been a deluge of consumer savings flowing into Cash ISAs this year, prompted by significantly more attractive interest rates and rising tax liabilities.”
Mr Khalaf noted that, while Cash ISAs initially seemed to become a dead product after the personal savings allowance was introduced in 2016, cash rates now “are back to more normal levels and income tax bands have been frozen”, meaning the “tables have turned”.
He said: “In the first nine months of this year, £42 billion has been saved into Cash ISAs, up from £36 billion over the same period in 2023, and compared to a net outflow of £4.2 billion in 2022.”
He added: “Savers are dead right to make the most of their available tax shelters seeing as we’re in the middle of a dramatic rise in taxation.”
