Close Brothers Savings has increased the interest on its one-year fixed Cash ISA to 4.55%, earning an “excellent” Moneyfacts rating.
The account is aimed at savers with larger sums to invest, requiring a minimum deposit of £10,000 to open.
However, savers can expect to see sizeable returns. To give an example of the interest the pot can amass at its current rate, a £10,000 deposit is estimated to earn £455 over the course of a year.
Fixed rate Cash ISAs have grown in popularity recently in the high interest rate environment and fixed tax allowances. A Cash ISA is a type of savings account that allows UK residents to save or invest without paying tax on the interest earned, up to an annual limit of £20,000 for the 2024/25 tax year.
The account now takes a “market-leading” position in the fixed savings market, according to Caitlyn Eastell, a spokesperson at Moneyfactscompare.co.uk.
Ms Eastell said: “Close Brothers Savings has increased the rates on a selection of its fixed rate cash ISAs alongside re-launching its easy access account.
“The one-year fixed ISA option pays a shared market-leading rate of 4.55% and may well appeal to those looking to maximise their tax-free savings in the short term. Savers will need a substantial initial investment of £10,000 but further additions are permitted for 10 days from the account opening if they wish to invest more.”
However, she noted restrictions for those who need to access their funds.
Ms Eastell said: “Savers should be cautious as even though early access is permitted, this will result in account closure and is subject to a 90-day loss of interest penalty. Overall, the deal earns an Excellent Moneyfacts product rating.”
While Close Brothers Savings may offer an appealing deal, competition doesn’t fall far behind.
Castle Trust Bank joins the provider with the table-topping 4.55% Annual Equivalent Rate (AER). Savers can launch this account with a smaller minimum deposit of £1,000, with interest paid on maturity. People can access their funds on closure only, which will be subject to a 90-day loss of interest.
United Trust Bank offers a one-year fixed account with an AER of 5.54%. Savers can open the account with a minimum deposit of £5,000, with interest paid at maturity.
Alternatively, interest can be withdrawn annually on the account anniversary. Early access is allowed, but it comes with a penalty of losing 180 days’ worth of interest.
According to Moneyfacts’ data, the average one-year fixed Cash ISA rate today is 4.09%, making these deals notably higher than the current market average.
Commenting on the market, Rachel Springall, finance expert at Moneyfacts, said: “Average rates across fixed bonds and fixed ISAs have now been below 5% for an entire year. This is unwelcome news for savers with maturing bonds, but it is still essential to avoid any indecisiveness to secure a new deal as rates fall.
“The average one-year fixed bond rate has dipped by 0.47% over the past six months alone. In positive news, providers will likely make efforts to entice savers with newly priced fixed rate ISAs in the weeks ahead, but the peak of such a rate war would typically be seen in March, and early April at the start of the tax-year.
“Therefore, some savers may feel inclined to adopt a wait-and-see approach until nearer the new tax year.”
