Paragon Bank has launched a new double-access Cash ISA with 4.8% interest, earning an “excellent” Moneyfactscompare rating.
The account can be launched with a minimum deposit of £1,000 and interest can be paid annually or monthly at 4.70% gross/4.80% Annual Equivalent Rate (AER).
However, savers looking for flexibility to access pots should be aware that only two withdrawals are permitted within a 12-month period. If three or more withdrawals are made, the rate drops to 1.25% AER.
Cash ISAs have become increasingly popular over the past few years as higher interest rates have dragged more people into tax thresholds. These accounts allow people to save up to £20,000 a year tax-free.
Commenting on Paragon Bank’s new deal, Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: “Paragon Bank has launched a new Double Access Cash ISA – Issue 7 this week, which pays a competitive rate of 4.80% gross/AER on its anniversary.
“The deal also offers a monthly interest option, which may appeal to those savers who want to supplement their income.
“As the name of the account may suggest, savers are permitted to make two withdrawals in any 12-month period, but any more will result in the rate paid dropping to 1.25% gross/AER, so careful planning is a must.”
Listing another perk, Ms Springall said: “This Cash ISA also accepts transfers in from other Cash ISAs or Stocks and Shares ISAs.”
She added: “Overall, the account earns an Excellent Moneyfacts product rating.”
While Paragon Bank may be offering a competitive rate for easy access Cash ISAs, it isn’t quite taking the top spot.
Plum’s Cash ISA offers a tiered interest rate of 5.18% on deposits over £100, while a lower rate of 2.5% is paid on deposits below this. The rate includes a 1.37% bonus for 12 months.
Interest is paid monthly and up to three withdrawals are permitted per year to keep the higher interest rate.
For savers looking for more flexibility to dip into their pots, Trading 212’s Cash ISA offers an AER of 4.9% with unlimited withdrawals. A minimum deposit of £1 is required to launch the account and interest is paid daily.
