Best buy cash Isa launched by Zopa Bank – but there is a huge catch


Products featured in this article are independently selected by This is Money’s specialist journalists. If you open an account using links which have an asterisk, This is Money will earn an affiliate commission. We do not allow this to affect our editorial independence. 

Zopa Bank has hiked its cash Isa rate to 5.01 per cent, placing it at the top of This is Money’s best buy cash Isa table.

The boosted rate is only available to new users – and there is a huge catch.

The Zopa easy-access Isa includes a 1.21 per cent bonus rate fixed for just three months, meaning the rate will drop to 3.8 per cent once that period is up.

The app-based account pays interest on a monthly basis, and savers are able to open accounts with just £1.

The account is flexible, meaning savers can withdraw and replace money during the same tax year without it affecting their allowance. Withdrawing money from your account won’t cut the interest rate you are entitled to, as is the case with some other cash Isa accounts.

Zopa accepts Isa transfers from a minimum of £500, and says the money will arrive in you new Isa within 15 days.

Boost your Isa: Zopa has the leading cash Isa rate on the market

Boost your Isa: Zopa has the leading cash Isa rate on the market

The bank said transfers can be cancelled if you change your mind.

Zopa accounts are FSCS protected, meaning that your money is protected up to £85,000 if the bank fails.

James Blower, head of savings at Zopa, said: ‘As the Isa deadline approaches, savers will be looking to maximise their tax-free allowance. 

‘What’s different this year is that the future appeal of cash Isas faces uncertainty, amid speculation that the Government will weight incentives towards investment accounts such as stocks and shares Isas going forwards.

‘Given this possibility, the increasingly varied cash Isa and investment accounts to choose from and the increased number of providers, savers must look at the finer details to see how various Isa options stack up against their needs.’

The move comes just 22 days before the end of the tax year, 6 April, when Isa savers’ allowances reset.

Savers have until then to make use of their £20,000 Isa allowance for the current tax year.

There have been rumours that the Chancellor plans to cut the cash Isa allowance in the spring statement, after city firms lobbied for the allowance to be reduced to promote stocks and shares Isas.

However, latest reports indicate that cash Isas will face no changes in the upcoming statement, though changes could still be incoming further down the line.

The second-best cash Isa rate is currently offered by Chip*, which includes a 0.68 per cent bonus for a six-month period. After six months the rate drops to 4.32 per cent.

Meanwhile, CMC Invest* offers 4.85 per cent, Tembo offers 4.8 per cent. Trading 212* and Plum* both offer a 4.78 per cent rate.

This is Money’s Five of the best cash Isas round-up puts CMC Invest* in top spot, as the account is flexible, has unlimited withdrawals and doesn’t have a time limited bonus, while also having a top rate. 

SAVE MONEY, MAKE MONEY

Up to £3,000 on new accounts and transfers

Isa cashback

Up to £3,000 on new accounts and transfers

Isa cashback

Up to £3,000 on new accounts and transfers

Check price cap beating deals with uSwitch

Fix energy bills

Check price cap beating deals with uSwitch

Fix energy bills

Check price cap beating deals with uSwitch

Free share and ETF dealing, no account fee

Fee-free Isa investing

Free share and ETF dealing, no account fee

Fee-free Isa investing

Free share and ETF dealing, no account fee

Flexible cash Isa with unlimited withdrawals

4.85% cash Isa

Flexible cash Isa with unlimited withdrawals

4.85% cash Isa

Flexible cash Isa with unlimited withdrawals

Up to £3,000 when you open a Sipp by 5 April

Sipp cashback

Up to £3,000 when you open a Sipp by 5 April

Sipp cashback

Up to £3,000 when you open a Sipp by 5 April

Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence. Terms and conditions apply on all offers.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *