Secure Trust Bank has launched a new Cash ISA with a fixed interest rate of 4.65 percent for two years.
Savers will need a minimum deposit of £1,000 to invest and interest is paid annually.
Commenting on the deal, Caitlyn Eastell, a spokesperson at Moneyfactscompare.co.uk, said: “This week, Secure Trust Bank has launched several new fixed rate cash ISAs, including a Two-Year Fixed Rate Cash ISA until April 20, 2026.
“The account pays an attractive 4.65 percent on investments of £1,000 and secures a position within our top rate tables.”
Ms Eastell noted: “Savers should be prepared to lock their cash away in the longer term as any early withdrawals will be subject to 180-day loss of interest and account closure, so careful planning may be necessary.”
However, she added: “Savers may be glad to see that further additions of a minimum of £1,000 can be made for the first 30 days of the account opening.
“Overall, the deal earns an Excellent Moneyfacts product rating.”
But while Secure Trust Bank may be offering an attractive rate, it isn’t quite taking the top spot of two-year fixed rate Cash ISAs.
UBL UK is offering the most competitive Annual Equivalent Rate (AER) of 4.7 percent. The account can be opened with £2,000 and interest is paid on maturity.
Earlier access will be subject to a charge of 180 days’ loss of interest.
Close Brothers Savings and OakNorth Bank also offer AERs of 4.7 percent for their two-year fixes, each with differing opening deposit requirements.
Close Brothers Savings requires a minimum despot of £10,000 and interest is paid annually. Early withdrawals are subject to 150 days’ loss of interest.
For savers with smaller deposits to invest, OakNorth’s account requires just £1 to launch and interest is paid monthly. Earlier access to this account will be subject to 180 days’ loss of interest.
The new tax year on April 6 will mark the milestone 25th anniversary of the ISA, which has developed into a popular account, allowing individuals to shield investments and savings from tax on gains, dividends and interest payments.
People can save up to £20,000 a year without having to pay tax on interest.
Myron Jobson, senior personal finance analyst at interactive investor, said: “ISAs have been a success story, with around 22 million adults in the UK holding savings and investments in an ISA, valued at approximately £741.6 billion.
“While few have been in the fortunate position to make full use of the annual allowance every tax year, many have benefited from not insignificant tax savings when they have sold their investments.
“The significant cut to both CGT and dividend tax allowances provides further impetus to make the most of the tax-efficient ISA wrapper if you haven’t already done so.”
He added: “The cut to the respective allowances means that those with more modest portfolios held outside a tax wrapper face a growing tax burden as their investments grow.”
