Castle Trust Bank has launched a new market-leading e-Cash ISA with an interest rate of 5.05 percent, earning an “excellent” Moneyfactscompare rating.
The interest rate is fixed for one year and paid to savers when the account matures.
Commenting on the deal, Caitlyn Eastell, a spokesperson at Moneyfactscompare.co.uk, said: “This week, Castle Trust Bank has launched its new one-year Fixed Rate e-Cash ISA.
“The ISA takes a competitive position within its sector and pays an attractive 5.05 percent. This account may well appeal to savers looking to utilise their ISA allowance and receive a guaranteed return on their investments.
“Although earlier access is permitted, it will be subject to 90 days’ loss of interest and closure of the account, which should be carefully considered.”
Additionally, Ms Eastell noted: “It is important savers fund their account with a minimum opening investment of £1,000 within the first 14 days, otherwise they will receive no interest payment and their money will be refunded.
“However, savers will be able to contribute more funds if they wish as further additions are permitted for 14 days from the account opening.
“On assessment, the account secures an Excellent Moneyfacts product rating.”
While Castle Trust Bank may be offering the top interest rate, competition doesn’t fall too far behind. Zopa’s Smart One Year Fixed Term ISA pot is offering an Annual Equivalent Rate (AER) of five percent.
Savers need a minimum opening deposit of just £1 and interest is paid monthly. Earlier access for this account is allowance on closure only, otherwise, savings will be subject to 90 day’s loss of interest.
Paragon Bank’s One Year Fixed Rate Cash ISA falls just behind with an AER of 4.9 percent. A minimum deposit of £500 is required to launch the account and interest is paid on the anniversary of opening. Earlier access is also subject to 90 day’s loss of interest.
Savers could be in for a surprise this April as almost a fifth (19 percent) think they can roll over their ISA allowance to the next tax year, according to new research from Shawbrook.
However this is incorrect as an individual’s ISA allowance resets annually on April 6, and any unused portion from the previous year is lost.
The research also found nearly one in five savers are confused and unaware of the legalities of having an ISA account with 16 percent of savers incorrectly thinking they can backdate their ISA allowance to cover previous years.
However, contributions can only be made within the current tax year and backdating contributions to cover previous years is not possible.
Adam Thrower, head of savings at Shawbrook commented: “It’s use it or lose it with ISAs and savers should be mindful of the annual ISA allowance reset. It’s crucial to understand you can’t carry over unused contributions. With rising interest rates, even basic rate taxpayers risk exceeding the Personal Savings Allowance, highlighting the importance of ISAs.
If you haven’t yet used up this current year’s ISA limit now is the time to review your contributions and consider topping up before April 6.”
