Zopa Bank has launched a new savings product, the Smart ISA, which currently boasts a number of competitive interest rates for fixed terms.
The range includes six ISA accounts, including easy access and five fixed-term accounts spreading from one year to five years with interest rates spanning three percent to 4.75 percent.
Similar to Zopa’s Smart Saver account, customers can split their ISA allowance across up to 20 easy access and fixed-term pots, all easily managed within the Zopa app, to make the most of different interest rates.
Cash ISAs are a popular savings option as they come with additional benefits, such as enabling savers’ money to grow without having to pay tax on the interest above the Personal Savings Allowance (PSA).
Cash ISAs offering a fixed rate help add another layer of certainty, as savers are able to lock in the interest rate offered at the time of opening without having to worry about it changing.
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These accounts typically come with a few more restrictions, such as larger opening deposits and stricter withdrawal terms. However, Zopa offers more flexibility with withdrawals and savers can open an account with just £1.
A statement on Zopa’s website explains: “Zopa’s Smart ISA is flexible. That means you can withdraw and replace money in the same tax year without affecting your allowance.
“For example, say you’d saved £10,000 in your Smart ISA. You could withdraw this in full and then add it back in within the same tax year and still have £10,000 of your ISA allowance left.”
However, it noted that savers wouldn’t be able to pay into another provider’s cash ISA in the same tax year and any money withdrawn and moved outside of the Smart ISA will no longer qualify as tax-free.
The full range of Zopa Smart ISAs includes:
- Easy access: three percent
- One-year fixed term: 4.70 percent
- Two-year fixed term: 4.75 percent
- Three-year fixed term: 4.75 percent
- Four-year fixed term: 4.65 percent
- Five-year fixed term: 4.65 percent.
To open a Smart ISA, people need to have already opened a Smart Saver. They also must be aged 18 or over, be a UK resident and UK bank account that the account can be linked to.
Savers also must not have paid into a cash ISA with another provider this tax year and it must be opened in their name only.
Zopa’s Smart ISAs also don’t currently accept transfers-in of existing ISAs held with other providers.
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