New Cash ISA launches with top 5% rate as customers given 22 days to act

With just 22 days until the end of the tax year, savers are being urged to review their returns and “use or lose” allowances. Amongst several providers offering new deals to entice customers, Zopa Bank has launched a new table-topping Cash ISA with a 5.01% .

The new easy access deal includes a 1.21% bonus rate fixed for three months, and savers can get started with just £1. Zopa says customers can initiate a transfer-in directly in the app in “under five minutes”, with the freedom to cancel if they change their mind. This flexible ISA allows savers to withdraw and replace funds within the same tax year without affecting their annual ISA allowance. Plus, there are no penalties or restrictions on withdrawals, making it a good option for those who want easy access to their .

James Blower, head of savings at Zopa Bank, highlighted that maximising your Cash ISA is even more important as the future of its .

Mr Blower said: “What’s different this year is that the future appeal of Cash ISAs faces uncertainty, amid speculation that the Government will weight incentives towards investment accounts such as Stocks and Shares ISAs going forward.”

Cash ISAs allow savers to grow their money tax-free on interest up to the £20,000 annual allowance without being subject to the Personal Savings Allowance (PSA).

Analysts speculate that Chancellor may propose cuts to the allowance in her upcoming Spring Statement on March 26, potentially reducing it to £4,000 to generate more revenue.

Mr Blower continued: “Given this possibility, the increasingly varied Cash ISA and investment accounts to choose from and the increased number of providers, savers must look at the finer details to see how various ISA options stack up against their needs.”

Mr Blower explained that the best ISA isn’t just about the highest rate, but factors like the ability to open multiple ISAs, ease of transfers, and simple account setup should be considered.

He also emphasised the importance of protections like FSCS coverage, the potential for bonus rates, and the flexibility to withdraw and replace funds within the same tax year.

He added: “Once you’ve chosen the right account, it’s time to maximise your allowance. ISA allowances are ‘use it or lose it’. While not everyone can save £20,000 per year, within the current rate environment, it’s easier for customers to use up their Personal Savings Allowance (PSA) and pay tax on savings. This makes Cash ISAs much more attractive.”

While Zopa may be topping the table, competition doesn’t fall too far behind. Savings app Chip offers an Annual Equivalent Rate (AER) of 5%. The account can be opened with just £1, and interest is paid monthly. To receive the bonus rate, savers must enter the code “MARCHBOOST” on Chip’s website.

After the initial bonus period, the will revert to Chip’s standard rate of 4.32% AER, so it’s important for savers to review their accounts regularly to ensure they’re still getting a competitive return. There are no penalties or restrictions on withdrawals.

Money app Plum follows with an AER of 4.78% on deposits over £100. The rate includes a 1.22% bonus of 12 months, and interest is paid monthly. However, a lower will apply if more than three withdrawals are made in one calendar year.

Trading 212 joins Plum in offering an AER of 4.78%. The rate includes a 0.28% bonus for 12 months, and interest is paid monthly. There are no restrictions on withdrawals.