Two providers now offer the best easy-access cash Isas paying 5.17% – which is better?

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A mini battle has broken out to top the easy-to-access and best-buy cash Isa charts between two providers.

Trading 212 and Moneybox have moved to increase their easy access Isa fees to a maximum of 5.17 per cent.

This rate blows the competition out of the water, with the next best easily accessible offer on This is Money’s best buy Isa tables paying around 4.9 per cent.

Trading 212 increased its rate to 5.17 percent today after raising the rate to 5.15 percent on October 31, while Moneybox made the same move.

This is Money compares these best buy accounts to run the rule on them.

Trade 212

Trading the 212 Cash Isa* launched in May 2024. It has proven to be immensely popular among savers due to the high interest rate it pays and the lack of restrictions or penalties for withdrawals, making it a truly easy-to-access account.

Flexible Isas allow you to dip into your fund and, as long as you pay the money back during the same tax year, you don’t lose its tax-free wrapper or use any of the £20,000 allocated from that year’s Isa.

The Isa can only be opened by downloading the Trading 212 app. There are no limits to the number of times you can withdraw your money and Trading 212 will not reduce your interest rate to access your money.

Interest is paid daily and customers can see how much money their savings has accumulated each day in the app. Customers can start saving in a Trading 212 Isa with £1.

The rate is variable, meaning it can go up or down depending on market conditions. Does not include bonus rate.

You can transfer Isas you have with other providers to Trading 212 Isas.

Is your money safe?

Money held in a Trading 212 Isa is fully protected by FSCS. Trading 212 Isa funds are held in bank accounts associated with Barclays, NatWest and JPMorgan.

Customers can see the percentage of the cash they have at each bank in interest on the cash tab in the Trading 212 app.

It means that if you already have money in Barclays, NatWest or JPMorgan, you will need to be careful not to go over the £85,000 limit if you keep money in Trading 212.

Piggy bank

Moneybox’s 5.17 per cent Easy Access Isa includes a bonus rate of 0.47 per cent for the first 12 months, meaning the underlying rate of the Isa is a variable rate of 4.7 per cent.

The account can only be opened by downloading the Moneybox app with a minimum deposit of £500.

You can only make three free withdrawals in a 12-month period with this Isa. On a fourth withdrawal, the rate drops to 0.75 percent. The number of withdrawals you can make resets to the date you opened your cash Isa.

If your Isa balance falls below £500, your rate will also drop to 0.75 per cent.

You can transfer Isas you have with other providers to Moneybox Isas. Interest is calculated daily and paid annually.

This Isa is not a flexible Isa, so any money you withdraw from it cannot be replaced within the same tax year without affecting your £20,000 Isa allowance. You will lose any amount you withdraw from the subsidy.

Is your money safe?

Money held in a Moneybox Isa is fully protected by FSCS. Moneybox uses a number of banks to provide FSCS protection for its cash Isa. He says these banks may change over time, but the banks he currently uses are:

• HSBC
• Santander United Kingdom
• National Westminster Bank
• Clydesdale Bank
• Bank of Scotland
• Lloyds Bank
• Qatar National Bank (QPSC)
• Abu Dhabi First Bank PJSC
• National Bank of Kuwait (International)
• The Bank of New York Mellon, London Branch

The amount of money held in each bank can vary over time. Moneybox says it will never hold more than 50 per cent of total funds in a single bank at any one time.

If you already have money in one of these banks, you’ll need to be careful not to go over the £85,000 limit if you keep money in Moneybox.

the verdict

For customers who want or need the freedom to dip into their savings more than three times in a 12-month period without interest rate penalties, Trading 212’s Isa is the clear winner.

Moneybox Isa comes with several penalties, so customers should make sure they don’t need to dip into their pot more than three times in 12 months and be careful their savings don’t fall below £500 or risk their rate drop to just 0.75 percent. .

Trading with the 212 Isa is a flexible Isa that is a great benefit for savers with the financial power to maximize their Isa limit each year. Moneybox Isa does not have this feature.

How a base rate cut would affect these rates

By increasing their rates, Trading 212 and Moneybox are countering the trend of providers reducing savings rates.

But the rise in interest rates comes as the Bank of England is widely expected to cut interest rates to 4.75 percent from 5 percent at tomorrow’s Monetary Policy Committee meeting.

This raises the question of how long these top-tier Isa rates will continue.

The last time the Bank of England moved to reduce the base rate to 5 per cent in August from 5.25 per cent, This is Money analysis found that more than 100 savings banks had had their rates reduced or were completely withdrawn from the market in the week after the base rate. rate cut.

Even if the Bank keeps the base rate at its current level, savings providers may respond by cutting rates.

When the Bank of England kept the base rate at 4.75 per cent in September, Trading 212 responded by cutting its Isa rate from 5.2 per cent to 5 per cent.

Moneybox’s interest rate is also variable, so it could go down if the base rate is reduced tomorrow.