Wealth app Chip has increased the interest rate on its easy access ISA, placing it at the top of the table of its sector.
The account now offers an Annual Equivalent Rate (AER) of 5.1 percent, paid monthly.
The account can be opened and managed using the provider’s app and new and existing customers can get started with just £1.
Withdrawals are allowed at any time without penalty, and its flexible ISA nature allows funds to be replaced without impacting the annual ISA allowance. However, the account does not allow transfers in, which means savers are not able to move funds held in other ISAs into the account.
Commenting on the new deal, James Hyde, a spokesperson at moneyfactscompare.co.uk, told Express.co.uk: “The new Chip Cash ISA (powered by ClearBank) currently tops the Moneyfacts Best Buys for Variable Rate Cash ISAs.
“The product guarantees that the Gross Rate paid will be a maximum of 0.60 percent below Bank Base Rate – it’s currently offering 4.99 percent Gross, with interest paid monthly.
“The account, which is available with a deposit of just £1, can only be opened and managed via mobile app. A Chip Savings Account is required to qualify to open this ISA, however.”
With ISA season in full swing, Britons are urged to check if they can make the most of the tax-saving benefits these accounts can provide.
Uma Rajah, CEO and co-founder of CapitalRise, said: “Now is the time for everybody to get their investments in order, as we are just a matter of weeks away from the start of the new tax year.
“Make sure you are making the most out of your current £20,000 annual tax-free allowance by looking into all the ISA options available to ensure you are still saving or investing at a competitive rate.
“It is important that the public is aware of the true benefits of ISAs, as well as how they work. This is essential at this time of high costs and inflation, to ensure your money is working as hard for you as it can be.”
Cash ISAs provide a personal tax-free allowance of up to £20,000 per tax year, which can be split between different ISA types or put all into one.
Ms Rajah said: “You do not need to pay income tax, tax on dividends, or capital gains tax on funds in an ISA, potentially saving you a lot of money.
« If you can afford to do so, you should aim to max out your tax-free ISA allowance each year, because whatever is not used is lost.”
But while Chip may be offering the top rate for easy access ISAs, the competition doesn’t fall too far behind.
Moneybox is currently offering savers an AER of 5.09 percent. A minimum deposit of £500 is needed to open the account, interest is paid on the anniversary, and up to three withdrawals are permitted without losing interest.
For those looking for more freedom, Zopa’s Smart Saver offers an AER of 5.08 percent.
The account can be opened with a minimum of £1, interest is paid monthly, and withdrawals are permitted at any time.
