Building Society launches new fixed ISA with ‘attractive’ 5.6% interest rate

Tipton and Coseley Building Society have launched a new 18-month fixed rate ISA paying a 5.6 percent interest rate.

Savers can open an account with a minimum deposit of £1,000 and interest is paid annually and at maturity on February 28, 2025.

Commenting on the deal, Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: “Tipton and Coseley Building Society has launched a new Fixed Rate ISA which pays an attractive rate of 5.6 percent until February 28, 2025.

“Investors who want to utilise their ISA allowance and are happy to lock their cash away may then find this an appealing choice.

“Consumers can make Cash ISA transfers into the account, and if they so wish, access their deposit subject to a loss of interest penalty. Overall, this deal earns an Excellent Moneyfacts product rating.”

The account can be opened and managed through the building society’s mobile app and savers must be aged 18 or over.

Transfers out in full and early closure are allowed, but will be subject to a charge of 90 days interest on the account balance.

If there is insufficient earned interest to cover the 90-day loss of interest then the difference will be taken from the balance in the account.

But while Tipton and Coseley may be offering an attractive deal, it isn’t currently topping the table for 18-month ISAs. According to Moneyfactscompare, Skipton Building Society’s 18-Month Fixed Rate Cash ISA (Issue 220) is offering the market-leading rate of 5.65 percent.

The account can be opened with a minimum deposit of £5,000 and savers can opt to have interest paid monthly or annually.

This product is available to UK residents aged 16 or over and can be opened and managed online, over the phone, by post or in a branch. However, it cannot currently be opened in the Skipton App.

Partial withdrawals are not permitted but early closure is, however, similar to Tipton and Coseley’s account, customers will lose 90 days’ interest.

For a slightly smaller opening deposit, Newcastle Building Society’s 18-Month Fixed Rate ISA (Issue 17) pays an Annual Equivalent Rate (AER) of 5.4 percent, and savers can get started with just £1.

The interest rate is fixed until March 6, 2025, and people can opt to have it paid monthly or annually.

The account can be launched in a branch or online, however, early withdrawals will be subject to a larger loss of 120 days’ interest.

ISAs are a popular savings option for Britons as they enable savers’ money to grow without having to pay tax on the interest above the Personal Savings Allowance (PSA), which is £20,000 for the 2023/24 tax year.