New cash Isa battle sends rates UP again: How to lock into a top deal before a Bank of England rate cut
Updated:
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Cash Isa savers can now have the chance to earn 4.87 per cent interest, ahead of a base rate decision which could see savings rates come down.
Investing platform Trading 212 has launched a 0.77 per cent bonus rate on its cash Isa for new customers, boosting the overall rate to 4.87 per cent.
The underlying 4.1 per cent rate is variable, but the 0.77 per cent bonus is locked in for 12 months.
Trading 212's cash Isa tracks the base rate minus 0.15 per cent. If it continues to do this, the bonus rate means savers will beat the base rate for the next year.
For example, if the Bank of England decides to cut the base rate to 4 per cent on 7 August as predicted, the bonus means savers will still earn 4.62 per cent interest.
You only need to deposit £1 to get started.
Trading 212: The boosted rate on its cash Isa means savers should beat the base rate
Even though Isa rates aren't explicitly tied to the base rate, providers often move them in response – and Trading 212 says it does this immediately following a change.
Market forecasts suggest the Bank of England will cut the base rate two more times before the end of 2025, bringing it down to 3.75 per cent from 4.25 per cent currently.
Terms and conditions apply, so make sure you read them when applying. You must sign up using the exclusive link for This is Money readers below.
> Sign up for a Trading 212 cash Isa*
Trading 212's latest Isa boost has kicked off a new bout of interest rate increases, with Moneybox and Plum hiking their bonuses to match rates from CMC Invest and Trading 212.
Here's how the top cash Isas stack up:
| CMC Invest | Moneybox | Plum | Trading 212 | |
|---|---|---|---|---|
| Core rate | 4.59% | 3.95% | 3.29% | 4.1% |
| Boost | 0.85% (3 months) | 0.85% (12 months) | 1.57% (12 months) | 0.77% (12 months) |
| Average 12-month rate | 4.8% | 4.8% | 4.86% | 4.87% |
This is Money says: CMC Invest* offers a very attractive headline rate of 5.44 per cent, but the boost only lasts for three months.
Its average rate over 12 months is therefore slightly lower than Trading 212's current offer. But savers may still be tempted by CMC Invest's core rate, which is currently higher than the base rate. It's also worth exploring if you're already a Trading 212 customer.
We like cash Isas from CMC Invest and Trading 212* because they're both flexible, meaning you can withdraw money without affecting your Isa allowance, as long as you replace it within the same tax year.
The options from Moneybox and Plum* aren't flexible and both have restrictions around withdrawals. If you take money out more than three times in the year, you'll receive a lower interest rate.
Trading 212 is mainly known as an investment platform and offers a stocks and shares Isa – read more about how Trading 212 fares for do-it-yourself investors in our Trading 212 review.
And for another top deal, Freetrade is offering cashback on both its stocks and shares Isa and self-invested personal pension until 31 August.
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