Savings app boosts interest on Cash ISA to 5.01% and earns ‘excellent’ rating (Image: Getty)
Smart money app Plum has raised the on its easy access Cash to a market-leading 5.01% – earning an “excellent” Moneyfacts rating.
Savers can launch the account with a £1 deposit and interest is paid monthly.
However, savers must invest at least £100 to receive the full 5.01% Annual Equivalent Rate (AER). This rate includes a 1.22% bonus for 12 months, after which the rate will drop.
Cash ISAs have become increasingly popular over the past years, with higher . These accounts allow people to save up to £20,000 a year tax-free.
Easy access accounts also provide savers with more flexibility to dip into their pots when needed – although some slightly restrict this. Plum’s account allows up to three withdrawals in one year without penalty. After the fourth, the will drop to 2.5%.
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Savers can opt to have interest paid monthly, which could make an “attractive” income boost (Image: Getty)
Commenting on the deal, Caitlyn Eastell, a spokesperson at , said: “This week, Plum has increased the rate paid on the £100 tier of its Plum Cash ISA.
“Now paying a market-leading rate of 5.01% AER / 4.94% gross and, as interest is paid monthly, it could be an attractive option for savers looking to boost their income.”
However, Ms Eastell pointed out: “It may be important to note that this rate includes a 1.20% gross bonus for 12 months, and savers will face a reduction in the paid if they make more than three withdrawals per year.
“Overall, this deal earns an Excellent Moneyfacts product rating.”
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While Plum may be offering the top rate for easy access Cash ISAs, competition doesn’t fall to far behind.
Moneybox’s Cash ISA pays an AER of 5%, which includes a 0.55% bonus for 12 months.
Savers can launch the account with a minimum deposit of £500 and up to three withdrawals are permitted per year. The , which is paid on the anniversary of opening the account, will drop on the fourth withdrawal.
For savers looking for more flexibility, Trading212 offers an AER of 4.9% and unlimited withdrawals.
Savers need a minimum deposit of £1 to open the account and interest is paid daily.