Virgin Money increases interest rate on fixed cash ISA – ‘excellent’

With Britons well in the depths of cash ISA season, these products have been in growing demand, Moneyfacts research shows. But those hoping to invest will want to ensure they’re opting into the savings product offering the best deal, and Virgin Money’s fixed rate cash ISA has earned a Moneyfacts ‘excellent’ rating.

Cash ISA season has “sprung a growth” in product choice, which is edging closer to “record-breaking levels”.

Commenting on the market, Rachel Springall, finance expert at Moneyfacts, said: “Savers will find the number of deals (439) is at its highest since August 2019 (453), when choice peaked.”

Ms Springall continued: “Those savers who prefer to fix their ISA cash will find the average one-year fixed ISA rate stands at its highest point since January 2009 and is a notable 2.82 percent higher than that of a year ago.”

Virgin Money has boosted the interest on its One Year Fixed Rate Cash E-ISA (Issue 555) to an Annual Equivalent Rate (AER) of 3.95 percent.

Cash ISAs come with additional perks and benefits, as these accounts allow savers’ money to grow without the need to pay tax on the interest above the Personal Savings Allowance (PSA).

Deals offering a fixed rate can also help add certainty to saving, as these allow people to lock in the rate offered at the time of opening.

Average saver has £17,365. Best buy account turns it into £21,640 [EXPLAINED]
Check if you have won Premium Bond’s prize draw for March 2023 [INSIGHT]
Top cash ISAs, easy access, regular and fixed savers for 2023 [ANALYSIS]

However, cash ISAs can come with a few more restrictions, such as penalty charges for early access or transfers, or a specific deposit amount required per month. This makes it a better option for those who can afford to put money away for longer periods of time without dipping in.

Savers can open the Virgin Money account with just £1 and interest is applied annually on August 5, while those who opt for monthly payments will see interest applied on the last day of the month, on the next working day.

The account can be opened online by UK residents aged 16 or over, and only one account can be opened at a time.

Commenting on the deal, Eleanor Williams, finance expert at Moneyfacts, said: “Savers who are yet to use their tax-free savings allowance might be tempted by the One Year Fixed Rate Cash E-ISA Issue 555 from Virgin Money.

“Following a rate increase of 0.10 percent this week, this ISA now pays 3.95 percent yearly, which sees it improve its place in the top 10 when compared to others currently on offer with similar terms.

“Another feature which may boost the appeal of this ISA further is that there is an element of flexibility for savers, as earlier access is permitted, however, this is subject to a loss of interest penalty.”

Any withdrawals made within the fixed rate period are subject to a charge equivalent to 60 days’ loss of interest on the amount withdrawn.

Savers who invest in Virgin Money accounts can also have access to special deals across the wider Virgin Group that can help people save on items like everyday essentials, as well as days out and holidays.

Ms Williams added: “Investors can make further additions and transfers in for 30 days from account opening, which may also add to its appeal. Overall, this earns an excellent Moneyfacts product rating.”

Source: Read Full Article