Virgin Money offers ‘excellent’ 5.52% interest rate on fixed cash ISA deal

Virgin Money is offering a new interest rate on its fixed cash ISA, earning a Moneyfacts “excellent” rating.

The One Year Fixed Rate Cash E-ISA (Issue 622) is now paying a 5.56 percent Annual Equivalent Rate (AER), retaining a prominent position on the top table.

Commenting on the deal, James Hyde, a spokesperson at Moneyfactscompare.co.uk, said: “This week, Virgin Money has changed the issue number and reduced the rate on its One Year Fixed Rate Cash E-ISA.

“The deal now pays a rate 5.52 percent gross/5.66 percent AER, and may appeal to savers who want to utilise their ISA allowance and are happy to lock their cash away for a year.”

Mr Hyde added: “The account can be opened and managed online, and can be set up with a balance of just £1. Overall, this deal earns an Excellent Moneyfacts product rating.”

READ MORE: ‘How I saved my first £10,000 as a teenager while working part-time’

The account is available to savers aged 16 or over and interest can be paid monthly or annually.

Up to £2million can be invested overall and withdrawals are permitted, however, each will be subject to a charge equivalent to 60 days’ loss of interest.

Savers can also find attractive one-year fixed deals with other providers, such as Castle Trust Bank and Charter Savings Bank, which are offering interest rates of up to 5.75 percent and 5.72 percent respectively.

People can open Castle Trust Bank’s Fixed Rate e-Cash ISA online with a minimum deposit of £1,000 and interest is paid on maturity.

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The account is available to savers aged 18 or over and up to £500,000 can be held in the account in total.

Similar to Virgin Money, withdrawal rules are strict and if a person needs access, they’ll need to withdraw the full amount and pay a charge equivalent to 90 days’ interest.

Charter Savings Bank’s One Year Fixed Rate Cash ISA, paying 5.72 percent, can be opened with a slightly larger deposit of £5,000. The account is also available to people aged 18 or over, who can opt for interest to be paid monthly or annually.

Withdrawals are also permitted, provided that the balance does not drop below £5,000. These will also be subject to a charge equivalent to 90 days’ interest, so savers should be comfortable investing the money without touching it in order to capitalise on the full ISA benefits.

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Commenting on the market, Rachel Springall, finance expert at Moneyfactscompare.co.uk said: “Those savers who frequently utilise their ISA allowance each year may be encouraged by the latest uplift in choice across the Cash ISA market.

“The number of Cash ISAs available stands at 529, the second highest on record, and average rates across variable and fixed ISAs are at their highest levels in almost 15 years.”

Ms Springall said savers “would be wise” to look for ISAs that apply flexible ISA rules if they need to dip into their pot and top up their ISA during the same tax year.

She added: “Those who make use of their Personal Savings Allowance (PSA) must not forget about their yearly ISA allowance and consider them for their long-term tax-free benefits, particularly as interest rates have been on the rise.”

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