New finest purchase money Isas launched – are they price taking out?

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Savings rates have plummeted since the Bank of England cut the base rate to 4.75 per cent earlier this month.

But some savings providers are bucking the by boosting their rates instead of cutting them.

Money app Plum has boosted its easy-access cash Isa* deal to 5.18 per cent, nudging it to the top of the best buy table.

Meanwhile, Hargreaves Lansdown’s one-year fixed-rate Isa* paying 4.5 per cent with Hampshire Trust Bank is available through its cash Isa platform.

So are these deals worth taking out? We take a look. 

Best buys: Two providers have bumped the rates on their cash Isas launching them to the top of the best buy tables

Plum’s easy-access deal

At 5.18 per cent, Plum’s easy-access Isa* now offers the highest rate for a cash Isa, but it comes with a few catches that may make it less attractive than Isas paying lower rates. 

The rate includes a bonus rate of 1.39 per cent for the first 12 months and the underlying rate is a variable 3.79 per cent.

Customers can also only make up to three free withdrawals without any impact on their rate. After the fourth withdrawal, the rate drops to 2.5 per cent. 

Transfers in from another Isa are currently not eligible for the bonus rate, so any customers transferring an Isa will only earn 3.79 per cent. 

Plum’s Isa is not flexible, so any money withdrawn from it cannot be replaced within the same tax year without affecting your £20,000 Isa allowance. You will lose whatever amount you withdraw from the allowance.

The Isa can be opened with as little as £1 but customers must deposit £100 in the Isa to get the bonus rate. 

Interest is calculated daily with the underlying interest paid monthly and added to customer’s balances, while the bonus rate interest is paid after 12 months.

All money deposited in Plum’s Isa is eligible for Financial Services Compensation Scheme protection of up to £85,000 per person.

This FSCS protection means savers’ cash is protected up to £85,000 per person if the firm fails.

The money is deposited with Lloyds Bank and Citibank which provide Plum’s FSCS protection as it doesn’t have a full banking licence.

This Isa can only be opened by downloading Plum’s app.

Trading 212 boosted its cash Isa* rate to 5.17 per cent earlier this month. It is a flexible Isa which pays daily interest and has no withdrawal restrictions.

> Five best Isas: This is Money’s round up of the best cash Isas 

Hargreaves Lansdown one-year fix with Hampshire Trust Bank

Hargreaves Lansdown’s one-year fixed Isa* on its cash Isa platform paying 4.5 per cent through Hampshire Trust Bank.

This is the best rate for a one-year Isa. The next-best one-year rate is 4.49 per cent from Shawbrook Bank. 

Savers can open the Isa by opening an account on Hargreaves Lansdown’s Cash Isa platform* and choosing Hampshire Trust Bank’s Isa. 

Savers can spread their Isa allowance across other easy-access and fixed-rate Isas on the Cash Isa platform. 

Hargreaves Lansdown also has a cash savings platforrm called Active Savings, but this only offers easy-access and fixed-rate savings accounts, not Isas. 

Any money kept in a cash Isa with Hargreaves Lansdown is fully protected up to £85,000 under FSCS. The money is kept with Barclays.  

The Isa can be opened with a minimum deposit of £1 and the interest is paid when the one-year term is up. 

A saver putting £10,000 in this Isa would have £459 after a year according to This is Money’s savings calculator. 

This is a good option for savers who want to lock away some savings for a year in an account offering a high rate – though they must be sure they won’t need to access the money in that time, as there will be penalties for doing so.

Caitlyn Eastell of rates monitor Moneyfacts Compare said: ‘Sensible savers would be wise to consider locking away their cash for guaranteed returns.’