Bank raises interest rate on fixed Cash ISA to 4.93% and earns 'excellent' rating
The new ISA pays a "competitive" interest rate for those looking to put money away for a year.
Charter Savings Bank has increased the interest rate on its fixed Cash ISA to 4.93 percent, earning an “excellent” Moneyfactscompare rating.
The interest rate is fixed for one year and is paid to account holders on the anniversary of opening.
Commenting on the deal, Caitlyn Eastell, a spokesperson at Moneyfactscompare.co.uk , said: “Boosting its position in the market this week, Charter Savings Bank has increased the rate on its 1 Year Fixed Rate Cash ISA, which now pays a competitive 4.93 percent.
“Savers will need to make an initial £5,000 minimum investment, however, for those who wish to do so, further additions can be made for 30 days from the account opening.
“It would be sensible for 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.
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.
“Savers can also choose to split their Cash ISA savings across multiple ISAs within Charter’s range. Overall, the deal earns an Excellent Moneyfacts product rating.”
While Charter Savings Bank may be offering a more appealing deal, it isn’t currently topping the table in the one-year fixed rate ISA sector.
Virgin Money's One Year Fixed Rate Cash ISA Exclusive (Issue 13) places at the top of the list with an Annual Equivalent Rate (AER) of 5.05 percent.
No minimum deposit is required to get started, interest is applied on maturity, and early access is subject to 60 days' loss of interest.
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Placing just behind is Secure Trust Bank’s One Year Fixed Rate Cash ISA with an AER of 4.95 percent. The account can be launched with a minimum deposit of £1,000 and interest is paid yearly.
Savers should be comfortable investing money until the term matures on August 25, 2025, as earlier access is only permitted on closure and will be subject to a 90-day loss of interest via the nominated account.
The top short-term fixed bond rates have fluctuated recently, with savings rates higher than longer-term offers, according to Moneyfactscompare’s analysis.
Rachel Springall, a finance expert at Moneyfactscompare.co.uk, said: “The rise and falls of fixed bond rates have been evident over the past couple of years, making it a challenging environment for savers unsure whether to lock their cash into a deal or for how long.
“The top rates are largely offered by challenger banks who strive to draw in deposits to fund their future lending.”
Ms Springall said that such competition and brand variety make it an “interesting space” for consumers comparing deals, but this also means savers “need to be quick off the mark” to secure a top rate before institutions meet their deposit targets.
However, she noted: “Just because the top rates move, does not necessarily mean the whole market is moving in a similar trajectory, so savers need to compare deals carefully.”
