A savings provider has boosted the interest rate on its Cash ISA to 4.36% in a bid to offer Brits the “best rates”. Plum announced on Wednesday (January 28) that it had hiked its rate for new customers to 4.36% AER, with the bonus part of that rate now 1.82% AER.
Victor Trokoudes, Chief Exec and founder of Plum, said: “We know savers will want to find ways to make their money work harder for them, especially as certain offers are withdrawn or reduced following the Bank of England base rate decrease last month.
“At Plum, we’re dedicated to offering the best rates we can and that’s reflected in our recent decision to increase our interest rate on our Cash ISA for new customers.”
Threadneedle Street cut its base rate by 0.25 percentage points to 3.75% in December, signally a potential boost to borrowers and blow to savers as lenders slashed rates in response.
You can start saving in Plum’s Cash ISA with just £1, but will need to keep an account balance of at least £100 and make no more than three withdrawals in a single year to qualify for the bonus.
The bonus is calculated daily and paid after 12 months from the date the Cash ISA is opened.
Plum’s Cash ISA is only available for UK residents. You can either open a new ISA or transfer an existing Cash ISA into the London-based financial firm via its app.
Cash ISAs are a tax-efficient way of allowing savers to put aside £20,000 per year. There are two main types – those which offer a fixed interest rate and those with a rate that varies with the Bank of England’s base rate.
Plum’s Cash ISA rate is variable, though the company pledges to give its customers notice when that happens.
Its variable Cash ISA has been listed in the top three of Moneyfactscompare.co.uk’s best variable rate ISAs.
At the top of the pack is Trading 212’s Cash ISA Promo Rate, which offers 4.40% AER, followed by Moneybox’s Cash ISA at 4.39% AER.
Both Trading 212 and Moneybox’s offer includes a bonus for 12 months. It is only possible to open and manage these accounts online.