Virgin Money offers market-leading 5.5% interest rate on fixed cash ISA

Virgin Money is currently offering a market-leading Annual Equivalent Rate (AER) of 5.5 percent, and savers can get started with just £1.

Cash ISAs offer a number of additional savings perks, such as allowing up to £20,000 to be deposited per year without having to pay tax on the interest above the Personal Savings Allowance (PSA).

ISAs that offer a fixed rate mean the bank or building society cannot change the rate of interest during a certain specified term, which can be a good option for those looking to save long-term.

These accounts can also come with additional restrictions, like penalty charges for early access or transfers.

Virgin Money’s Three Year Fixed Rate Cash E-ISA (Issue 605) can be opened with a minimum deposit of £1 and savers can opt for interest to be paid either monthly or annually.

Annual interest is paid on August 5, whereas monthly interest is paid on the last day of the month.

Withdrawals are allowed within the fixed term but the money cannot be put back in and will be subject to a charge equivalent to 120 days’ loss of interest on the amount withdrawn.

One account can be opened per UK resident and savers must be over 16. Opening an account with Virgin Money can also grant savers access to special deals across the wider Virgin Group that can help people save on everyday essentials, days out and holidays.

The account can be opened with a minimum deposit of £1,000 and interest is calculated daily and paid annually on December 31 and on maturity.

But while the Virgin Money Three Year Fixed Rate Cash ISA tops the leaderboard of three-year fixed accounts, competition isn’t too far behind. Secure Trust Bank’s Three Year Fixed Rate Cash ISA is currently offering an AER of 5.4 percent.

Partial withdrawals are not allowed and in the event that the account is closed before maturity, an ‘early access charge’ of 270 days’ interest will be applied.

Savers must be aged 18 or over, have a valid National Insurance number and be a resident in the UK and the product can only be applied for online.

Following closely behind is West Brom BS’ Three Year Fixed Rate ISA with an AER of 5.35 percent. The account can be opened with a minimum deposit of £1 and interest is paid annually on July 31.

Withdrawals are permitted but will be subject to an early access charge equivalent to 270 days’ loss of interest. The account can be launched in a branch or by post – not online.