Virgin Money offers a new interest rate on its fixed cash ISearning a Moneyfacts rating of “excellent”.
The one-year fixed cash E-ISA (issue 622) now pays 5.56 per cent annual equivalent rate (AER), retaining its prominent position at the top of the table.
Commenting on the deal, James Hyde, spokesman at Moneyfactscompare.co.uksaid: “This week Virgin Money changed the issue number and reduced the rate on its one-year fixed rate Cash E-ISA.
“The deal now pays a rate of 5.52 per cent gross/5.66 per cent AER, and could appeal to savers who want to use their ISA top-up and are happy to lock in their cash for a year.”
Mr Hyde added: “The account can be opened and managed online and can be set up with a balance of just £1. Overall, this business gets an excellent Moneyfacts product rating.”
The account is available to depositors aged 16 and over, and can be paid monthly or annually to those interested.
Up to £2 million can be invested in total and withdrawals are allowed, however each will be subject to a charge equal to 60 days’ interest loss.
Savers can also find attractive one-year fixed deals with other providers, such as Castle Trust Bank and Charter Savings Bank, which offer interest rates of up to 5.75 per cent and 5.72 per cent respectively.
People can open a Castle Trust Bank Fixed Rate eCash ISA online with a minimum deposit of £1,000 and interest is paid on maturity.
The account is available to savers over the age of 18, and up to a total of £500,000 can be held in the account.
Similar to Virgin Money, the withdrawal rules are strict and if a person needs access they will have to withdraw the full amount and pay a fee equal to 90 days interest.
Charter Savings Bank’s One Year Fixed Rate Cash ISA, paying 5.72 per cent, can be opened with a slightly larger deposit of £5,000. The account is also available to people aged 18 or over, who can choose monthly or annual interest payments.
Withdrawals are also allowed, provided the balance does not fall below £5,000. They will also be subject to a charge equal to 90 days’ interest, so savers should be comfortable putting money away without touching it to take full advantage of the ISA.
Commenting on the market, Rachel Springall, financial expert at Moneyfactscompare.co.uk said: “Those savers who use their ISA top-up frequently each year can be encouraged by the latest increase in choice in the Cash ISA market.
“The number of cash ISAs available is 529, the second highest on record, and average rates for variable and fixed ISAs are at their highest levels for almost 15 years.”
Ms Springall said savers “would be wise” to look for ISAs that apply flexible ISA rules if they need to invest money and top up their ISA in the same tax year.
She added: “Those using their Personal Savings Allowance (PSA) should not forget about their annual ISA allowance and consider these as their long-term tax-free benefits, especially as interest rates are on the rise.”