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Savvy savers know that Cash Isa rates are rising and providers are competing for our easy-to-access personalized accounts.
Recent rate increases include Plum* at 5.01 percent, Piggy bank at 5 percent and Chip* at 4.85 percent, while Commerce 212* now sits at the top of the tree with an exclusive rate of 5.05 percent for This is Money readers, including a 0.15 percentage point bonus.
It should be easy to get the most out of your Cash Isa, but navigating it can be complicated and time-consuming.
Since the introduction of Isas 26 years ago, there have been many changes to the rules. There are so many differences in what providers offer that you need to go beyond looking at the rate to make sure it works for you and your lifestyle.
Is the account flexible? Can you withdraw money when you need it and how long is the maximum interest rate? Suppliers are not all the same.
Some will allow you to take money out and replace it (as long as you do it in the same tax year) without affecting your £20,000 cash Isa allowance. Others don’t even though government rules say they can.
Skyrocketing rates: Easy-access cash Isas are being propped up by a host of new rivals, including a 5.05% bonus rate from Trading 212
Your provider will tell you whether it’s a flexible Isa or not, but you’ll often find the answer hidden in the terms and conditions.
Flexibility is vital for savers who use their full £20,000 cash Isa allowance each year. You can move in and out of your savings throughout the year and earn tax-free interest.
You can, for example, deposit £10,000 during this tax year and then withdraw £3,000.
If your Isa is flexible, your remaining allowance is £13,000. If not, it’s £10,000.
If you want to change your flexible provider to another, make sure you replace the money you want before you move. The key rule is that you must replenish the money into the same Isa account you took it from.
Some cash Isas allow you to withdraw money as often as you like, while others restrict the number of times you can do so.
Isas can come with a bonus (which lasts only one year), so you will have to move your money when the time is up or accept a lower rate.
Last week, Plum* raised its rate to 5.01 percent, including a first-year bonus that raises the rate from the base 3.79 percent.
It restricts you to three withdrawals a year. If you earn more, your rate drops to 2.5 percent.
Chip* raised its rate for new customers to 4.85 percent, which includes a bonus payable over 12 months on top of its standard 4.58 percent.
Trade 212* pays 5.05 percent, a base 4.9 percent plus a 0.15 point bonus for new savers, with no withdrawal restrictions, available only through this special link.
Meanwhile Piggy bank The 5 percent limits you to three withdrawals per year and includes a 0.55 percentage point bonus payable over one year.
Chip and Trading 212 are flexible Isas. Moneybox and Plum are not.
Some products from big providers are not Flexible Isas, including NatWest Cash Isa, HSBC Loyalty Cash Isa, Co-op (now part of Coventry BS) Cash Isa, Santander Easy-Access Isa and Virgin Money (now part of Nationwide) Defined Access . Isa.
Flexible high-rate online Isas with no withdrawal restrictions include Monument Bank at 4.76 per cent, but needs £10,000 to open an account.
Ford Money pays 4.35 per cent on £1 more. On the main street, Newcastle BS Double Access Isa 4.25 percent are restricted to two withdrawals a year.
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