The top easy-access cash ISA now pays more than top savings accounts - the highest since 2008, according to MoneySavingExpert.com.
Even if people don't pay tax on savings, it's still the highest easy-access rate.
In the MoneySavingExpert's Money Tips Email, the MSE team unveiled a new cash ISA which can see people getting a top rate on their savings.
The new variable rate Trading 212 5.2 per cent cash ISA takes top place for easy-access ISAs and beats the top normal savings too.
Savers can store new money in it, and it normally allows people to transfer cash from existing ISAs too.
Britons need £1 minimum to open the account and they can put £20,000 in per tax year to a cash ISA and the interest is never taxed.
Once the money is deposited, it stays tax-free year after year if people don't withdraw it.
Interest on the account is paid daily to help maximise one's earnings. There are no withdrawal restrictions which means one's cash is always free to use.
They can withdraw or invest it at any time without impacting their interest rates and without any penalty fees.
Even if people don't pay tax on savings - as they earn under the Personal Savings Allowance (PSA) the MSE team explained it's still worth looking at as the interest's higher.
The PSA people get depends on what rate of income tax they pay:
- Basic-rate (20 per cent) taxpayers: can earn £1,000 in savings interest per year with no tax
- Higher-rate (40 per cent ) taxpayers: can earn £500 in savings interest per year with no tax
- Additional-rate (45 per cent) taxpayers: £0 – they do not get an allowance.
Other top contenders:
For new money & transfers, Charter Savings Bank's 4.97 per cent. with a minimum £5,000 deposit.
Kent Reliance's offers 4.86 per cent for a minimum deposit of £1,000.
For new money only, app-only Plum pays 5.17 per cent for 12 months with a minimum deposit of £100.
However, this account only allows three withdrawals a year without penalty.
Top one-year cash ISA fixes:
Castle Trust Bank's 4.87 per cent (min £1,000), or if someone has a Virgin Money current account there's Virgin's 5.05 per cent with no minimum deposit required.
MSE said: "Worth noting, if you are definitely locking money away and don't pay tax on savings, the top fixed normal savings rates beat cash ISAs."
LATEST DEVELOPMENTS:
Savers have benefited from the Bank of England’s decision to raise the base rate in its fight against inflation.
Despite the consumer price index (CPI) easing to 2.3 per cent, the central bank has held interest rates at 5.25 per cent since August 2023.
While this has been detrimental to homeowners and those in debt left struggling with rising repayments, bank customers can still take advantage of high-interest savings accounts.
