Tipton and Coseley Building Society have launched a new Cash ISA paying 5.01 percent interest, earning an “excellent” Moneyfactscompare rating.
The new Single Access ISA, one of two launched by the mutual this week, offers the “most competitive” rate of the pair.
Commenting on the deal, Caitlyn Eastell, a spokesperson at Moneyfactscompare.co.uk, said: “Tipton and Coseley Building Society has launched two new variable rate accounts this week, the most competitive of which being the Single Access ISA (Mobile App Account) which pays 5.01 percent.
“Investors who want to utilise their full ISA allowance may find this an ideal option as it requires an initial minimum investment of £1,000 and further additions are permitted.”
However, she noted: “The account only permits one penalty-free withdrawal per year, and any made thereafter will be subject to a 60-day loss of interest payment.
“Overall, this deal earns an Excellent Moneyfacts product rating.”
But while Tipton and Coseley Building Society may be offering a competitive deal, it isn’t currently topping the table of the easy-access Cash ISA market.
For those who need more flexibility, Trading 212 is taking the top spot with its Cash ISA offering an Annual Equivalent Rate (AER) of 5.2 percent. There are no withdrawal restrictions and interest is paid daily.
Plum falls just behind with an AER of 5.17 percent off a £100 deposit. The interest rate includes a 0.86 percent bonus for 12 months. Interest is paid monthly and up to three withdrawals are permitted without facing a lower interest rate.
More savers are targeting Cash ISAs to protect their money from tax while allowances remain frozen and interest rates are high.
New research by Paragon Bank shows ISAs account for 96 percent of adult net savings growth in 2024.
Data from CACI reveals that overall adult cash savings have increased by £28.9 billion since January, reaching £1.179 trillion by the end of May.
Of that growth, £27.7 billion is from Cash ISAs, while only £1.2 billion of net growth was recorded in non-ISA cash savings.
Derek Sprawling, managing director of savings at Paragon Bank said: “We would expect the switch to ISAs to continue for the remainder of the year.
“With approximately 70 percent of all fixed-rate savings accounts due to mature this year, we would expect to see more money being moved into a mix of instant access and fixed-rate cash ISAs to shield the money from tax.”
