Savings app Moneybox is offering a market-leading interest rate of 5.11 percent on its easy access Cash ISA product, earning an “excellent” Moneyfacts rating.
Savers need a minimum deposit of £500 to get started and interest is paid annually on the anniversary of opening.
Commenting on the deal last week, Caitlyn Eastell, a spokesperson at Moneyfactscompare.co.uk, said: “Moneybox has increased the rate on its Cash ISA.
“Taking the lead position in the variable rate ISA market, the deal now pays an attractive 5.11 percent, which includes a bonus of 0.96 percent for the first 12 months.
“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, savers should note that only three withdrawals can be made per year before a lower rate is paid.”
Withdrawing funds more than three times – or letting the balance drop below £500 – will trigger a lower interest rate of 0.75 percent.
Nonetheless, Ms Eastell added: “Overall, this deal earns an Excellent Moneyfacts product rating.”
But while Moneybox may be offering the most attractive rate, the competition doesn’t fall too far behind.
For those looking for more flexibility, Chip is offering an Annual Equivalent Rate (AER) of 5.1 percent with unlimited withdrawals. Savers need just £1 to launch an account and interest is paid monthly.
Zopa’s Smart Saver places just behind with an AER of 5.08 percent. This includes a 0.5 percent bonus rate until April 6, 2025.
The account can be opened with a minimum of £1. Interest is paid monthly and withdrawals are permitted at any time.
New changes to ISA terms were announced during Chancellor Jeremy Hunt’s Autumn Statement, and are set to come into effect in April.
Savers will be able to have more than one of the same type of ISA. They will also be able to transfer part of their savings between different providers during the year, and there won’t be a need to reapply for an existing dormant account.
However, the limits for different types of ISAs will remain the same (£20,000 for cash and stocks and shares ISAs, £9,000 for a junior ISA, and £4,000 for a Lifetime ISA).
Adam Thrower, head of savings at Shawbrook said the Chancellor’s announcement to allow people to save into more than one Cash ISA will enable savers to “truly benefit” from the higher rates available.
Mr Thrower said: “Currently, although savers can ask a provider to transfer old ISA deposits while keeping the tax-free status, it can feel like another barrier.
“Allowing them to take advantage of higher ISA rates across more than one option gives them the potential to make more from their money.”
The annual allowance for ISAs will start for the 2024/25 tax year on April 6.
