Bank increases interest rate on Cash ISA to 4.65% and earns 'excellent' rating
The new interest rate has boosted the Cash ISA to a more "competitive" position in its sector.
OakNorth Bank has raised the interest rate on its two-year fixed Cash ISA to 4.65 percent, earning an “excellent” Moneyfactscompare rating.
The account can be launched with a minimum deposit of just £1 and interest is paid monthly.
Commenting on the deal, Caitlyn Eastell, a spokesperson at Moneyfactscompare.co.uk, said: “OakNorth Bank has increased the rates on its fixed term ISAs this week.
“The 24-month option takes a competitive position in the fixed ISA market when compared to other products of a similar term.
“The deal pays 4.55 percent gross/4.65 percent AER monthly, which may be enticing for those looking to supplement their income each month.”
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.
Ms Eastell continued: “Investors will need to invest as little as £1, however, further additions can be made for 30 days from the account opening.
“It is wise for investors to note that the account must be funded within 30 days of account approval, or it will be closed. Overall, this deal earns an Excellent Moneyfacts product rating.
While OakNorth Bank may be offering the most competitive deal, several other savings providers are currently matching the rate.
United Trust Bank and Close Brothers Savings also offer Annual Equivalent Rates (AER) of 4.65 percent on their two-year fixed ISAs but with much larger minimum deposit requirements.
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Savers can launch United Trust Bank’s Cash ISA Two Year Bond with a minimum deposit of £5,000.
Interest is paid on the anniversary and earlier access will be subject to 270 day loss of interest. However, interest can be withdrawn annually on the anniversary.
Close Brothers Savings requires a minimum deposit of £10,000 to open the account and interest is paid yearly.
Earlier access to this account is permitted on closure only and will be subject to 150 day loss of interest.
