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As the Bank of England continues to raise its Base Rate, savers are currently being offered some of the highest returns with cash ISAs. Against rapidly fluctuating rates, fixed-term accounts offer an added layer of certainty around savings – allowing account holders to lock in the rates offered at the time of opening. However, some accounts are offering better rates than others.
While there is currently no savings account offering an interest rate that exceeds the UK’s staggering 11.1 percent inflation, fixed-term cash ISAs are generally known to offer higher rates than other savings accounts.
These accounts also come with additional perks and benefits, as these accounts allow savers’ money to augment without having to pay tax on the interest above the Personal Savings Allowance (PSA).
However, cash ISAs can come with a few more restrictions, such as penalty charges for early access, or a specific deposit amount required per month.
This means it makes for a better savings option for those who can regularly put money away and keep it there without touching it for a few years.
But like with all accounts, some banks are currently offering better rates than others. Money comparison site MoneyFacts has pulled together the top 10 fixed rate ISAs available right now.
Top 10 fixed rate ISAs
Ranking top of the list of fixed rate ISAs with the highest interest rate is Cumberland BS’ 5 Year Fixed Cash ISA with an Annual Equivalent Rate (AER) of 5.05 percent.
A minimum deposit of £1,000 is required to open the account and interest is paid annually on February 28.
The interest is fixed until the term ends on March 28, 2028, and withdrawals are not permitted before this date. Earlier access on closure is subject to 180 days’ loss of interest.
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Coming in second is another Cumberland BS account, its 2 Year Fixed Cash ISA, also with an AER of 4.75 percent.
Like the five-year fixed bond, a minimum deposit of £1,000 is required to launch the account.
Interest is fixed until November 29, 2024 and is paid annually on October 31. Withdrawals are also not permitted for this account. Earlier access on closure is subject to 90 days’ loss of interest.
Third on the list is the State Bank of India’s 2 Year Cash ISA Fixed Deposit, also with an AER of 4.65 percent.
This two-year bond can be opened with a minimum deposit of £5,000 and interest will be applied on maturity, although it’s compounded annually.
Withdrawal or deposit transfers can be made before the end of the term if 30 days notice is provided. However, a partial withdrawal or transfer is not permitted.
Terms then vary for each year of interest gained if the deposit is withdrawn prematurely. For example, no interest will be paid if the account is closed before the first year of the anniversary, while interest will be paid at one percent less than the applicable rate of interest if it’s closed after one year – and so on.
Placing fourth and fifth, also with AERs of 4.65 are two more accounts from State Bank of India; its 3 Year Cash ISA Fixed Deposit and its 5 Year Cash ISA Fixed Deposit.
The same rules apply; the accounts require a minimum deposit of £5,000, interest is applied on maturity, and partial withdrawals and transfers are not permitted.
In sixth place is Kent Reliance’s Cash ISA 2 Year Fixed Rate (Issue 62) with an AER of 4.4 percent.
A minimum deposit of £1,000 is required to open this two-year bond and interest can be paid away or compounded monthly or yearly. However, withdrawals are subject to a 180-day loss of interest penalty.
Placing seventh is Yorkshire Building Society’s Fixed Rate Cash e-ISA with an AER of 4.4 percent.
A minimum deposit of £100 is required to open the account and interest is paid annually. Early closure is permitted but will be subject to 180 days’ loss of interest. The term for this account will end on December 31, 2025.
Eighth on the list is Yorkshire Building Society’s Fixed Rate Cash ISA with an AER of 4.4 percent.
The same rules apply; a minimum £100 deposit is required and early access will be subject to 180 days’ loss of interest.
Castle Trust Bank’s Fixed Rate e-Cash ISA places ninth with an AER of 4.35 percent.
A minimum of £1,000 is required to open the account and interest is calculated daily and paid at maturity. Earlier access is only permitted on closure and will be subject to 180 days’ of loss.
Saffron BS’ Two Year Fixed Rate Cash ISA ranks tenth with an AER of 4.35 percent.
A minimum deposit of £500 is required to open this two-year bond and interest is applied on the anniversary of the account opening.
Transfers from other providers are not allowed, and early access will be subject to a charge equivalent to 180 days of interest.
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