Plum has increased the interest rate on its Cash ISA to 4.57%, earning it an "excellent" rating from Moneyfactscompare. This higher rate applies to new deposits, rather than funds from an existing ISA, so it suits customers with some money to spare in savings who are not yet using their full ISA allowance of £20,000.
The boosted rate includes a 12-month bonus of 2.01%, paid on the account's anniversary, so savers should be aware that the interest rate will drop by nearly half once the bonus ends. Brits can currently save up to £20,000 per year in a Cash ISA to earn tax-free interest on their money, and this account allows savers to save anything from £1 up to the annual limit.
Commenting on the deal, Caitlyn Eastell, personal finance analyst at Moneyfactscompare.co.uk, said account holders should review the deal once it expires.
She said: "This week Plum has increased the rate on its Plum Cash ISA for new money only, maintaining its position as the market-leader when compared to its peers.
"The account pays 4.57% AER, and savers can invest as little as £1. However, as is the case with many flexible ISAs, savers should note the generous 2.03% AER bonus rate which expires after 12 months, so it's crucial they review the deal once this expires.
"This account may be best suited for savers who may need to dip into their deposits frequently, as they have unlimited withdrawals without penalty.
"Investors who wish to transfer into this account should note that they will receive a lower headline rate of 4.07% AER. Overall, this deal takes a position as a Moneyfacts 'Best Buy' and earns an Excellent Moneyfacts product rating."
Customers can deposit and withdraw funds, with a minimum transaction amount of £1. The account has to be opened and managed through Plum's mobile app, and transfers are allowed from a range of accounts, including Stocks & Shares ISAs and Help to Buy ISAs.
Since Plum is not a bank, it offers accounts from other regulated banks, so savings will be protected by the Financial Services Compensation Scheme, up to the £120,000 limit, in the name of the bank providing the account.
How do other accounts compare?Trading 212 is offering a promo rate of 4.58% on its Cash ISA for new customers who go through moneyfactscompare.co.uk. Savers must open the account by April 13 to qualify for the enhanced rate, which applies to new deposits made in the current tax year.
Tembo Money is offering a rate of 4.3% on its Cash ISA, which includes a 12-month bonus rate of 1.5%. The minimum opening amount is £10.
Vanquis Bank is offering the same rate on its Triple Access Cash ISA account. This is for savers with larger pots, with a minimum opening amount of £1,000.
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