Shawbrook Bank is offering a market-leading five-year fixed Cash ISA with a 5.25% interest rate. As of Friday, September 25, this account pays 0.15% more interest than the next-leading product on the market.
If you open the account with the minimum amount of £1,000, your closing balance would be £1,292 after five years, representing earnings of nearly £300.
Account features and restrictions
The 5 Year Fixed Rate Cash ISA would suit someone who is happy to lock away their money for a prolonged period of time, because you cannot make withdrawals before maturity. Earlier access is subject to a 360-day loss of interest, so it is worth considering before opening the account.
You can save up to £250,000 in the account, but bear in mind that only £20,000 of those savings will earn tax-free interest. This is because everyone is limited to saving £20,000 every year in Cash ISAs.
You are guaranteed the rate of interest for the whole term, so even if the market dips, you will be paid the same. However, inflation may also rise, so it is worth bearing in mind when choosing to lock your money away in a fixed-term account.
Payment options and application
You will receive a higher interest rate if you choose to receive payments annually, but if you opt for monthly payments, it is 5.13%. You can only apply for this product online, and once your account is open, you can operate the account online or by telephone.
How do other accounts compare?
Close Brothers Savings is offering a 5 Year Fixed Rate Cash ISA with a slightly lower interest rate of 5.1%. Interest is paid yearly.
If you would prefer a shorter term, Aldermore is offering a 5% interest rate on its 3 Year Fixed Rate Cash ISA. The minimum opening amount is £1,000. Vida Savings is offering the same 5% rate on its 5 Year Fixed Rate ISA, which also must be opened with a minimum of £1,000. You can invest up to £500,000.
