Virgin Money boosts interest rate on fixed cash ISA to ‘excellent’ 5.05%

While inflation continues to erode purchasing power, many have been searching for a more lucrative cash ISA to help maximise their savings for the year ahead.

Virgin Money has boosted its position on the table with a more competitive 5.05 percent interest rate on its one-year fixed term account and has earned an “excellent” rating from Moneyfactscompare.co.uk.

Cash ISAs come with a number of additional benefits, such as enabling savers’ money to grow without having to pay tax on the interest above the Personal Savings Allowance (PSA).

ISAs that offer a fixed rate of interest can help add certainty to savings, as it means the bank or building society cannot change the rate during the length of the term.

Savers can open Virgin Money’s One Year Fixed Rate Cash E-ISA (Issue 599) with a minimum deposit of £1 and interest can be paid monthly or annually.

This account can be opened online by UK residents aged 16 or over and only one account is allowed per customer.

Withdrawals are permitted, however, the money cannot be put back in. Also, any withdrawals made within the fixed rate period will also be subject to a charge equivalent to 60 days’ loss of interest on the amount withdrawn.

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 days out and holidays.

Commenting on the deal, Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: “Virgin Money has changed the issue numbers and increased the rates on its Fixed Rate Cash E-ISAs this week, including its one-year deal which takes a prominent position in the market.

“The deal now pays a rate of 5.05 percent yearly and may appeal to savers who want to invest over the next two years and use their ISA allowance.

“Savers will also find a monthly interest option available that pays 4.94 percent gross, which may appeal if they are looking to supplement their income. Overall, this deal earns an Excellent Moneyfacts product rating.”

But while Virgin Money is offering a more competitive rate, it isn’t quite topping the table. According to Moneyfactscompare.co.uk, Charter Savings Bank’s One Year Fixed Rate Cash ISA takes the lead with an AER of 5.2 percent.

The account can be opened with a minimum deposit of £5,000 and interest can be paid monthly or annually. Savers must be aged 18 or over and UK residents.

Withdrawals are permitted, however, the balance cannot fall below £5,000 and the amount withdrawn will be subject to a charge, by way of a loss of 90 days of interest.

Kent Reliance’s Cash ISA One Year Fixed Rate (Issue 74) falls just behind with an AER of 5.1 percent. The account can be opened with a minimum deposit of £1,000 and interest can be paid monthly or annually.

Transfers out, withdrawals and closures are permitted but the amount withdrawn will be subject to 90 days’ loss of interest.