Bank increases rate on Cash ISA to top-paying 5%

Moneybox has increased the rate on its Cash ISA to offer a market-leading rate of five percent.

Savers have to have at least £500 in the account to get the interest rate. A person can make three withdrawals over each 12 months from the date of opening the account.

If a person makes a fourth withdrawal or if the balance is below £500, a lower rate of 0.75 percent will apply for the rest of the 12-month period or until the balance increases above £500.

The Cash ISA includes a bonus rate of 0.85 percent for the first 12 months. A person can transfer in funds from other ISAs into the account.

Moneybox is an app-based banking platform so a person will need to download the app to open an account.

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Other top-paying easy access ISAs include:

  • Coventry Building Society – Four Access ISA (Online) – 4.9 percent
  • Shawbrook Bank – Easy Access Cash ISA – Issue 25 – 4.81 percent
  • Chorley Building Society Easy Access Cash ISA (One Withdrawal) – 4.8 percent.

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Moneybox also currently offers the top-paying Lifetime ISA paying 4.25 percent including a bonus.

With a Lifetime ISA, a person can deposit up to £4,000 each tax year and gets a 25 percent bonus on top of this, up to £1,000 a year.

The funds have to be used towards buying a first home or once a person turns 60 – if a person accesses the money at another time they will pay a penalty.

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Many banks and building societies have been increasing their rates over the past year and a half as the base interest rate has increased.

The Bank of England decided to hold the base rate at 5.25 percent although some analysts predict it could go up again.

Nigel Green, chief executive of deVere Group, said: “We champion the Bank of England’s move to hold interest rates steady, but the central bank policymakers should go further and commit to stopping the hiking agenda, rather than just pausing it.

“The battle against inflation is gradually being won. Further squeezing already weak economic growth through making borrowing costs for consumers and companies down the line could leave long-term scars on the UK economy.”

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