Close Brothers Savings’ two-year fixed Cash ISA has earned an “excellent rating” after the interest rate was increased to 4.41%.
The account is aimed at people with larger sums to invest, as it requires a minimum deposit of £10,000 to open.
However, savers can expect to see sizeable returns. To give an example of the interest the pot can amass at its current rate, a £10,000 deposit is estimated to earn £441 over the course of a year.
Fixed-rate Cash ISAs have gained popularity in the current high-interest rate environment, offering people living in the UK a way to save without paying tax on the interest earned, up to an annual limit of £20,000 for the 2024/25 tax year.
Following the Bank of England’s recent Base Rate cut to 4.5%, savings interest rates are on the decline. This makes fixed-rate accounts more attractive, as they lock in the interest rate for a set term, allowing savers to secure higher returns.
Experts at Moneyfactscompare have praised the account for taking a “prominent” position in the market.
Caitlyn Eastell, spokesperson at Moneyfactscompare.co.uk, said: “Close Brothers Savings has increased the rates on a selection of its fixed rate bonds and Cash ISAs alongside changing the issue number on its easy access account this week.
“The two-year fixed ISA option takes a prominent position in the top tables, paying an attractive 4.41% and may well appeal to those looking to maximise their tax-free savings in the short-term.”
Ms Eastell explained that while savers must initially invest £10,000, they can make additional deposits within 10 days of opening the account if wish to.
However, she cautioned that early access to funds, while allowed, would result in account closure and a 150-day loss of interest penalty.
Ms Eastell added: “Overall, the deal earns an Excellent Moneyfacts product rating.”
A few other banks join Close Brothers Savings at the top of the two-year fixed Cash ISA table with Annual Equivalent Rates (AERs) of 4.41%.
These include Hodge Bank and Secure Trust Bank, which offer a 4.41% rate on smaller minimum deposits of £1,000. Interest is paid annually, but withdrawal terms differ slightly.
Hodge Bank allows earlier access. However, this will be subject to a 180-day loss of interest. Meanwhile, earlier access to the Secure Trust Bank account would result in closure and a 180-day loss of interest.
Hampshire Trust Bank follows closely behind with an AER of 4.31% on a minimum deposit of £1. Interest is paid on the anniversary of opening, and earlier access is subject to a 180-day loss of interest.
