Close Brothers Savings launches new ISA and earns ‘excellent’ rating | Personal Finance | Finance
Close Brothers Savings has launched a new three-year Fixed Rate Cash ISA that pays 5.15 per cent interest, earning a Moneyfacts “excellent” rating.
The account is aimed at savers with larger sums to invest as a minimum deposit of £10,000 is required to open.
However, savers can expect to see significant returns. To give an example of the interest the pot can collect at its current rate, a £10,000 deposit is expected to earn £515 over a year.
The account now has a “prominent” place in the upper tables, according to Caitlyn Eastell, a spokeswoman at Moneyfactscompare.co.uk.
She said: “Close Brothers Savings has launched a new Three Year Fixed Rate Cash ISA this week. Paying 5.15 per cent, the account takes a significant place within the top 10 compared to other fixed ISAs and may appeal to savers willing to lock up their money for an extended period to receive a guaranteed return.”
She noted, however, that early access is allowed but will be subject to 270 days of interest loss.
Miss Eastell said: “Savers will need £10,000 to invest but will be happy to know they can make further additions for 10 days from opening the account. Overall, the deal earns an excellent Moneyfacts product rating.”
While Close Brothers Savings may be offering an attractive deal, it’s not quite hitting the mark. ISA Smart ISA slightly outperforms Zopa with an AER of 5.16 per cent.
Savers aged 18 and over can open the account with £1 via the Zopa app. Zopa’s smart ISAs are flexible and allow money to be withdrawn and replaced in the same tax year without affecting their allowance.
Castle Trust Bank and Cynergy Bank are also offering AERs of 5.15 per cent. Savers need a minimum deposit of £1,000 to launch a Castle Trust Fixed Rate e-Money ISA and early access is subject to a 270-day interest loss.
Savers need a slightly smaller deposit of £500 to open a Cynergy Bank three-year arrangement, and early withdrawals are subject to a 180-day interest loss.
Commenting on the current high interest environment, Alice Haine, personal finance analyst at investment platform Best investment said: “Think carefully about where you stash [your savings]since too much held in a high-interest savings account can see people exceed their Personal Savings Allowance, leaving them liable to tax charges on the interest they earn.
“Increasing numbers of savers are being drawn into the tax net, being squeezed out by higher savings rates and the frozen allowance, which has remained unchanged since 2016.
“Instead, up to £20,000 of savings could be stabilized in more tax-efficient options such as an ISA, with an emergency pot in a Cash ISA and any extra money invested in a Stocks and Shares ISA.”
She said: “It’s worth remembering that while a bleak economic outlook can wreak havoc on people’s finances, it can also be a good time to invest and some investments may be available at the price of market.”
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