Virgin Money offers market-leading interest rate on fixed cash ISA

While interest rates fluctuate, fixed-rate products help add a layer of certainty to saving, as these accounts enable savers to lock in the rate offered at the time of opening. In response to a more stable market, interest rates have been plateauing – and in some cases even dropping lately, but Virgin Money is still offering savers an Annual Equivalent Rate (AER) of over four percent on its two-year fixed cash ISA.

Commenting on the market, Rachel Springall, finance expert at Moneyfacts, said: “The savings market appears to have entered a period of stability, a notable contrast from recent months of volatility.

“The average one-year fixed bond rate remained unchanged for the first time in a year (January 2022) and the average shelf life of fixed accounts overall rose by two days to 29 days.”

Ms Springall continued: “During the same period, all average variable rates rose, which includes variable rate cash ISAs.”

However, she noted: “Fixed savings providers adjusted their market positions, and for the first time in almost two years, the longer-term average rates across fixed bonds and ISAs fell. These movements show the change in attitude among providers in the aftermath of the interest rate uncertainties across the last quarter of 2022.”

READ MORE: ISA savers may be ‘pleasantly surprised’ with interest rates increase

Virgin Money is currently offering savers an AER or 4.11 percent on its Two Year Fixed Rate Case E-ISA (Issue 542).

The account can be opened with a minimum deposit of £1 and savers get to choose whether they’d like interest paid monthly or annually. Annual interest is paid on August 5, while monthly interest is paid on the last day of the month.

Withdrawals from this account are permitted but money cannot be put back in. Any withdrawals made within the fixed rate period are subject to a charge equivalent to 90 days’ loss of interest on the amount withdrawn.

Only one account can be opened per UK resident and they must be aged over 16. Savers with Virgin Money can also have access to special deals across the wider Virgin Group that can help people save on things like everyday essentials, as well as bigger things like days out and holidays.

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Secure Trust Bank places third on the list of Moneyfacts’ Best Buys offering an AER of 4.05 percent on its Two Year Fixed Rate Cash ISA.

This account requires a minimum deposit of £1,000 to open and interest is calculated daily and paid on December 31, as well as on maturity.

However, this is not a flexible ISA and partial withdrawals are not permitted. If the account is closed before it matures on February 26, 2025, an early access charge of 180 days’ interest is applied.