Shawbrook Bank has increased the interest rate on its fixed Cash ISA to 5.03 percent, earning an “excellent” Moneyfacts rating.
The account can be opened with a minimum deposit of £1,000 and savers can opt to have interest paid monthly or annually.
Commenting on the deal, Caitlyn Eastell, a spokesperson at Moneyfactscompare.co.uk, said: “Shawbrook Bank has made significant rate increases by up to 0.83 percent on a selection of its fixed rate products this week.
“One account seeing this is the One Year Fixed Rate Cash ISA Bond Issue 89. Savers can receive an attractive 5.03 percent gross/AER and it may appeal to those searching for a guaranteed return who don’t mind locking away their cash for the agreed term.”
Ms Eastell noted that savers looking to “maximise their income” can choose to receive the monthly interest option paying 4.92 percent gross/5.03 percent AER.
She added: “It is possible for consumers to make Cash and Stocks and Shares ISA transfers into the account.”
However, Ms Eastell noted: “Any early withdrawals are subject to a 90-day loss of interest penalty; however, savers can make further additions at any time. Overall, the deal earns an Excellent Moneyfacts product rating.”
While Shawbrook Bank may be offering a more competitive deal, it isn’t currently taking the top spot. Placing just ahead is Virgin Money’s Fixed Rate Cash ISA Exclusive (Issue 10) with an Annual Equivalent Rate (AER) of 5.25 percent.
There is no minimum investment amount to get started, interest is applied annually, and earlier access will be subject to 60 days’ loss of interest.
With ISA season now in full swing, new research has found a significant portion of consumers are not maximising the savings and investment potential of ISAs.
According to data from property investment firm CapitalRise, more than half (59 percent) hold £1,000 or less in their current ISA account.
Additionally, more than a third (34 percent) said they were not investing in any form of ISA this financial year.
Cash ISAs enable people’s money to grow without having to pay tax on the interest above the Personal Savings Allowance (PSA). During today’s period of high interest rates and frozen allowance thresholds, they can prove to be a particularly tax-efficient method to save money.
Uma Rajah, CEO and co-founder of CapitalRise, said: “As the cost of living remains high, it’s crucial for individuals to prioritise saving and investing to safeguard their financial well-being and prepare for their future, whether that’s for retirement or their children’s futures.
“ISAs offer a valuable avenue for long-term financial growth and security, yet there remains a crucial need for more awareness.”
He added: “There is clearly still some work to be done in bridging the knowledge gap surrounding tax advantages and investment options.”
