Bank raises interest rates across Cash ISA range as ‘popularity’ for accounts 'soar'
Savers can secure interest rates on certain ISAs of up to 4.76 percent.
Paragon Bank has increased interest rates across its range of fixed-rate Cash ISAs as popularity of the accounts “soar”.
Savers can enjoy new interest rates ranging from 4.05 percent to 4.76 percent on one to five-year deals.
Derek Sprawling, savings director at Paragon Bank, commented: “The popularity of ISAs soared in 2023, with much of that money directed towards fixed-rate variants.
“As those rates mature, we want to offer savers competitive options for their ISA cash.
“Nearly half of ISA savers also like to invest early in the new tax year and we have certainly seen that this tax year, with Paragon experiencing its busiest ever day for applications on 8 April.”
What is an ISA?
ISA stands for Individual Savings Account.
The main difference between an ISA and other savings accounts is it offers tax-free interest payments.
The ISA allowance for the 2024/25 tax year is £20,000.
You can have a cash ISA - including a Help to Buy ISA - a stocks and shares ISA, an innovative finance ISA, a Lifetime ISA or a mixture of them all.
You must save or invest by April 5 - the end of the tax year.
Mr Sprawling added: “We expect these rates to continue to be popular with new and existing customers looking to make the most of their tax-free shelter.”
The full list of increases include:
- One-year fixed rate cash ISA will increase from 4.71 percent to 4.76 percent AER
- Two-year fixed rate cash ISA will increase from 4.55 percent to 4.59 percent AER
- Three-year fixed rate cash ISA will increase from 4.30 percent to 4.35 percent AER
- Five-year fixed rate cash ISA will increase from four percent to 4.05 percent AER.
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In addition, Paragon has increased two rates on its non-ISA three and five-year fixed-rate savings accounts, rising from 4.2 percent and 3.9 percent to 4.35 percent and 4.05 percent respectively.
The new rates became available on Friday, May 28. Paragon’s range of savings products can be opened and managed online, over the phone or by post.
The fixed-rate ISA range require a minimum balance of £500, up to a maximum of £500,000 plus any resulting interest.
All of Paragon’s ISAs are eligible for the ISA Wallet feature. This allows savers to spread their £20,000 annual ISA allowance with Paragon across multiple cash ISAs, rather than just opening one specific account.
See how Paragon Bank’s new interest rates compare to the best deals of the week.
