Charter Savings Bank has launched a new fixed Cash ISA offering 4.42% interest – earning an “excellent” Moneyfacts rating.
Savers can launch the account with a minimum deposit of £5,000 and the interest rate, which is fixed for one year, can be paid monthly or annually.
Fixed-rate Cash ISAs have grown in popularity recently due to high interest rates and fixed tax allowances. A Cash ISA is a savings account that allows UK residents to earn tax-free interest on savings of up to £20,000 for the 2024/25 tax year.
However, with the Bank of England’s first Base Rate cut of the year to 4.5%, savings interest rates are falling. This makes fixed-rate accounts more appealing, as they allow savers to lock in the initial interest rate for a set period.
Average one-year fixed ISA rates have fallen to 4.06%, according to Moneyfactscompare, making Charter Savings Bank’s deal notably more competitive for savers seeking higher returns.
Commenting on the deal, Caitlyn Eastell, spokesperson at Moneyfactscompare.co.uk, said: “Charter Savings Bank has launched a new One Year Fixed Rate Cash ISA this week.
“It grabs a prominent place within the top tables and pays 4.42% on its anniversary. Those looking to boost their income will find there is also a monthly interest option.”
Ms Eastell added that after the initial £5,000 deposit, savers can make further additions for 30 days from the account opening. However, she warned investors to carefully consider earlier access as any withdrawals made before the one-year term ends are subject to a 90-day loss of interest penalty.
Ms Eastell continued: “Overall, the deal earns an Excellent Moneyfacts product rating.”
While Charter Savings Bank may be offering an attractive deal, it isn’t currently topping the table in the one year fixed Cash ISA market.
OakNorth Bank takes the lead with a 4.46% Annual Equivalent Rate (AER). Savers can launch the account with just £1, and interest is paid monthly. Similar to Charter Savings Bank’s deal, earlier access is subject to a 90-day loss of interest.
Secure Trust Bank is just behind with a 4.45% AER. Savers can launch the account with a minimum deposit of £1,000, and interest is paid annually. Earlier access is allowed on closure only and will be subject to a 90-day loss of interest.
Savers are being urged to act quickly to secure the top rates while they’re still available.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: “Now is an ideal time for savers to consider grabbing a fixed rate deal so they can get a guaranteed return on their cash. They may wish to act soon, as we have had a variety of providers cutting fixed rates across bonds and ISAs over the past week, some of which were market-leading.”
