Moneyfarm, the digital wealth manager, has launched a “competitive” easy access Cash ISA designed to help customers “achieve their short-term financial goals”.
The account offers new customers a competitive 4.70% variable interest rate for the first year. In the following years, interest will drop to 4.23% AER.
Existing Moneyfarm customers are offered a 4.43% variable interest rate for the first year. Savers must invest a minimum deposit of £500 to launch the account. Interest accumulates daily, and withdrawals are not penalised.
Customers will also benefit from Moneyfarm’s transfer service, which allows them to transfer existing ISAs without fees. This consolidates their savings under one roof without impacting their annual ISA allowance.
Chris Rudden, head of investment consultants UK at Moneyfarm, said: “We are pleased to introduce the Moneyfarm Cash ISA, the latest addition to our growing suite of savings solutions for our clients.
“This product is designed to help our clients save smarter and achieve their short-term financial goals with the security and flexibility they need.
“Whether you’re building an emergency fund or saving for a big milestone, the Moneyfarm Cash ISA offers tax-free growth and flexible access to your funds, making it an essential tool within your overall allocation.”
Cash ISAs have grown in popularity over the past years as higher interest rates continue to drag more people into savings tax thresholds. These accounts allow people to save up to £20,000 a year tax-free.
Easy access accounts are typically more flexible, allowing savers to make payments and withdrawals with minimal restrictions and small opening deposit requirements.
While Moneyfarm may be offering an appealing deal, it isn’t currently topping the table for easy access Cash ISAs.
Trading 212 takes the top spot with paying an Annual Equivalent Rate (AER) of 5.03%. This includes a bonus rate of 0.13% for 12 months, and interest is paid monthly. A minimum deposit of £1 is required to launch the account and there are no restrictions on withdrawals.
Moneybox follows closely behind with an AER of 5.02% on deposits of £500 and over. This includes a bonus rate of 0.57% for 12 months, and interest is paid on the anniversary of opening. A lower interest rate is paid if more than three withdrawals are made over a 12-month period.
Savings app Chip also offers a competitive AER of 4.89%. This includes a 0.54% bonus rate for six months, and interest can be paid monthly. A minimum deposit of £1 is required to launch the account and there are no restrictions on withdrawals.
Savers should re-assess their accounts when “bonus” periods end, as the rate drop could mean the product is no longer the most competitive on the market.
