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NatWest Launches TWO New Best Buy Cash Isa Offers and Closes the Gap on Best Taxable Fixed Rate Accounts


NatWest Launches TWO New Best Buy Cash Isa Offers and Closes the Gap on Best Taxable Fixed Rate Accounts

  • NatWest one-year cash Isa pays 5.7% and its best two-year fixed Isa pays 5.9%
  • The gap between the best two-year taxable account and Isa is now just 0.3%

NatWest has become the latest major bank to launch two table-topping cash Isa offerings.

Its one-year fixed rate cash Isa offers a tax-free interest rate of 5.7 percent, while its two-year fixed rate pays 5.9 percent.

Last month, Lloyds Bank made headlines when it also launched two market-leading cash Isa deals; back then, it was 4.95% and 5%, respectively, for a one- and two-year solution.

Someone who puts £10,000 into a one-year NatWest contract will earn £570 of tax-free interest over 12 months. Those who opt for their two-year cash Isa will earn £1,180 over the two-year period.

Lead Dog: NatWest’s one- and two-year fixed-rate cash Isa deals are market leaders.

What makes NatWest’s offering even more attractive is that it effectively closes the gap on the best taxable fixed-rate savings accounts.

The best one-year and two-year solution, currently offered by Vanquis Bank, pays 6.15 percent and 6.2 percent, respectively.

That equates to a difference of 0.3 percentage points between the best two-year cash Isa and the two-year taxable account. At the beginning of this month, the gap was 0.74 percentage points.

– Check out the best fixed rate savings offers here.

Currently, all those who save outside of an Isa could face a tax bill on their savings.

Basic rate taxpayers can earn up to £1,000 of tax-free interest each year.

Higher rate taxpayers can earn up to £500, while additional rate taxpayers (those earning more than £125,140) get no protection from the taxman.

A base rate taxpayer with money in a Vanquis year’s fix needs £16,262 in savings to get a tip on the amount of interest he can earn before tax.

The best accounts at a glance

Easy access: Chip* – 4.51%

Fixed rate for one year: Vanquis Bank – 6.15%

Two-year fixed rate: Vanquis Bank– 6.2%

Easy Access Cash Isa: leeds BS – 4.2%

Cash to one year Isa: NatWest – 5.7%

Effective two years Isa: NatWest – 5.9%

The products featured in this article are independently selected by This is Money specialist journalists. If you open an account using links that have an asterisk, This is Money will earn an affiliate commission. We do not allow this to affect our editorial independence.

A taxpayer with a higher rate would need £8,131 in the account to owe tax.

However, once that personal savings allowance has been used up, the real (after-tax) return from the 6.15 percent deal falls to 4.92 percent for base rate filers and 3.69 percent for higher rate filers.

Savers can deposit up to £20,000 into an Isa each year.

If you haven’t already and are considering a savings product, the NatWest Isa offerings might make a lot more sense than higher paying taxable fixed rate accounts.

Also, unlike taxable fixed rate offers that don’t allow withdrawals, Isa cash fixed rates offer a little more flexibility.

NatWest, for example, allows savers to close their account early and withdraw their funds subject to a 90-day loss of interest.

Anyone considering moving their current Isa to NatWest can do so too.

Accept transfers from Isas in cash, Isas in shares and participations, Isas Lifetime and Help to Buy Isas.

On its website, it warns that the deal might not last long. He says: ‘Available until 5:00 pm on August 9, 2023 for new customers and August 14, 2023 for existing customers.

“Please note that these numbers may be withdrawn early due to limited availability.”

Merry C. Vega is a highly respected and accomplished news author. She began her career as a journalist, covering local news for a small-town newspaper. She quickly gained a reputation for her thorough reporting and ability to uncover the truth.

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