21 Feb 19
The Scottish Sun
OAKNORTH Bank has launched a new cash Isa that will pay you 1.44 per cent in interest.
It’s not quite as good a rate as Virgin Money’s 1.45 per cent cash Isa, but with the OakNorth product you can make unlimited withdrawals, whereas with Virgin Money you can take money out twice a year.
Moneyfacts.co.uk reveals the best easy-access ISA deals on the market today
The minimum investment rate for the OakNorth Easy Access Cash Isa is £1,000, and the interest is paid monthly.
With Virgin Money the minimum deposit is just £1, but interest is paid yearly.
Virgin also has a special version of its top-rate account designed for Manchester United fans.
As well as the market-leading interest rate, you also get entered into prize draws to win football tickets and signed shirts.
How do Isas work?
Isas allow you to save money and earn interest tax-free.
The government decides the maximum amount you can save into Isas in a calendar year and the limit for this tax year is £20,000.
You can only have one “active” cash Isa product in each calendar year, so it’s important to choose the right one.
If you save into a stocks and shares Isa this also comes out of the same limit.
If you have a Lifetime Isa, there are separate limits and rules about how much you can save.
[boxout headline=”How do you switch Isa provider?” intro=”IF you’re in the market for a new, better paying Isa, there’s one thing you shouldn’t do.”]Never withdraw money from your Isa account to put it into your new one – if you do it’ll lose its tax free benefits.
Instead you need to follow the simple transfer process.
Make sure that the new account you want to use accepts transfers (not all do) and then fill in the Isa transfer form with the new provider.
It will arrange for your savings to be transferred over, with the process taking no more than 15 working days.[/boxout]
Is it worth getting a cash Isa?
Cash Isas have become less popular in recent years.
In part this is because a new government rule means you can earn £1,000 in interest on ordinary savings tax-free, which is enough for most people.
And Isa rates have plummeted as the Bank of England has kept the base rate low.
But even if you do need to regularly access your cash, easy access savings accounts tend to have better rates than Isas.
The best easy access savings account on the market pays 1.55 per cent, with ICICI Bank.
Usually, if you want the best Isa rates it pays to lock your money away.
The longer you agree not to touch it, the better rate you’ll get.
The best fixed-rate Isa comes from the Coventry Building Society and will pay 2.3 per cent – but you can’t touch your money for three years.
If you’re happy to leave your money alone, you’ll get the best rates with a savings accounts linked to current account.
These regularly pay interest of as much as 5 per cent.
You’ll usually have to leave the money alone for a year and you might have to commit to making a deposit every month.
There’s also a maximum amount you can save in a year.
For instance, the First Direct regular saver pays 5 per cent fixed for one year and you can save between £25 and £300 each month.
But if you miss a month or pay less than £25 you won’t get the interest.
When should you consider getting a cash Isa?
Cash Isas are still worthwhile for people who have maxed out their savings accounts, or who are likely to earn more than £1,000 in interest.
And interest rates are rising quite quickly, meaning you’ll get significantly better deals that you would have a year ago.
Rachel Springall, a finance expert at Moneyfacts said: “Clearly, providers are sowing the seeds for savers to discover market-leading returns, and as the Isa season flourishes, it will hopefully lead to increased competition and even better deals as we move closer to the new tax year.
“In fact, 15 providers have upped rates and 12 providers have launched fresh deals since the start of 2019.”
Despite this bounceback in easy-access rates, you’re unlikely to beat inflation unless you lock your money away.
[article-rail-section title=”MORE ON MONEY STORIES” posts_category=”34″ posts_number=”6″ query_type=”popular” /]
Best savings accounts 2019 including easy-access and fixed rate as interest rates rise.
ICICI Bank launches new best buy easy access savings account with 1.55% rate.
Martin Lewis reveals how you could earn 100 times more on your savings.
We pay for your stories! Do you have a story for The Sun Online Money team? Email us at email@example.com or call 0207 78 24516. Don’t forget to join the Sun Money’s Facebook group for the latest bargains and money-saving advice.
[bc_video video_id=”5999584158001″ account_id=”5067014667001″ player_id=”default” embed=”in-page” padding_top=”56%” autoplay=”” min_width=”0px” max_width=”640px” width=”100%” height=”100%” caption=”The Bank of England has kept interest rates the same – holding them at 0.75% in light of Brexit uncertainty”]