Top Cash ISAs offer over 5% interest rates
Savers in the UK are looking for ways to maximize their Cash ISA allowances as the end of the tax year approaches next week. Recent interest rate increases from savings providers have led to five accounts offering rates over 5%. Currently, UK residents can save up to £20,000 per tax year in a Cash ISA without paying tax on the interest. This is appealing, especially with high interest rates, as regular savings accounts have tax limits. Basic-rate taxpayers can earn £1,000 tax-free in interest, while higher-rate taxpayers can earn £500. Those in the additional-rate bracket face taxes on all interest. Concerns are rising about potential changes to the ISA allowance. Analysts expect that Chancellor Rachel Reeves might target it in her autumn budget. Some suggest reducing the tax-free allowance to £4,000 per year. Experts urge savers to take advantage of the current allowance while possible. Catherine Wray from Leeds Building Society stresses the need for savers to review their options. Opening new ISA accounts or transferring existing funds could be beneficial before the tax year ends. Easy access Cash ISAs offer tax-free benefits with no withdrawal restrictions. Here are the top five Cash ISAs with over 5% interest. First is the savings app Chip, offering a 5.26% Annual Equivalent Rate (AER) with a 0.90% bonus for new customers for three months. The account requires only £1 to open. Trading 212 matches Chip at a 5.26% AER, also with a bonus of 0.76% for three months. The minimum deposit is £1, and there are no restrictions on withdrawals. Next is Moneybox with a 5.25% AER, requiring a £500 minimum deposit and offering a 1.05% bonus for three months. It allows up to three withdrawals per year. Plum provides a 5.04% AER for deposits of £100 or more, including a 1.48% bonus for the first year. However, more than three withdrawals each year will lower the interest rate. Finally, Zopa's Smart ISA also offers a 5.04% AER, with a 1.16% bonus for three months. It can be opened with just £1, and there are no withdrawal restrictions.