With the new tax year underway, Britons may be searching for a more lucrative cash ISA to help maximise their savings for the year ahead.
Shawbrook has boosted its position on the table with a more competitive 4.31 percent interest rate on its two-year term account, and savers must have at least £1,000 to invest.
Launching in 2011, Shawbrook is a specialist savings and lending bank that offers personal loans, residential and commercial mortgages, business finance, and savings products.
The bank offers savers a choice of easy access, fixed rate bonds, notice, and cash ISAs, and has remained competitive with its interest rates over the months.
Last week, it increased the Annual Equivalent Rate (AER) on its Two Year Fixed Rate Cash ISA Bond (Issue 70) to 4.31 percent.
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Fixed term ISAs are a type of savings account that offers a set rate of interest for a specified length of time. This helps add a layer of certainty to saving, as it means the bank or building society cannot change the interest rate during that period, which works well for long-term savers.
Cash ISAs are also often a popular route people take to save, as these accounts allow up to £20,000 to be deposited per year without having to pay tax on the interest above the Personal Savings Allowance (PSA).
The Shawbrook account requires a minimum deposit of £1,000 to open and interest is calculated daily and paid on the anniversary of the first deposit.
People can also opt for interest to be paid monthly with a gross rate of 4.23 percent, which will be applied on the anniversary of the deposit every month unless it’s a weekend or Bank Holiday.
Withdrawals, including transferring out to other cash ISA providers, are permitted before maturity but this will be subject to a loss of 180 days’ interest.
Commenting on the deal, Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: “Shawbrook Bank has increased the rate on its two-year fixed ISA this week which takes a prominent position in the market.
“Savers looking to utilise their ISA allowance and desire a guaranteed return on their cash may find this a competitive choice.
“The account allows transfers in from both cash and stocks and shares ISAs, and earlier access is permitted subject to a loss of interest penalty.”
She added: “Those savers looking to supplement their income will also find the account offers a monthly interest option. Overall, the deal earns an Excellent Moneyfacts product rating.”
But while Shawbrook is offering a much more attractive deal, it isn’t quite taking the top spot of high-interest two-year cash ISAs. Coventry Building Society is currently taking the lead- with its Fixed Rate ISA (217) offering an AER of 4.35 percent.
The interest rate is fixed until May 31, 2025, and the rate is calculated and paid annually. Savers must be 16 or over and the account can be opened in a branch, by post, over the phone or online.
Similar to Shawbrook, the ISA can be closed or transferred before maturity, however, a charge equivalent to 180 days’ interest on the account balance will be applied.