Home Finance Building Society launches new Cash ISA paying 4.5% interest rate

Building Society launches new Cash ISA paying 4.5% interest rate

Melton Building Society has relaunched its 180-day Notice Cash ISA today with an interest rate of 4.5 percent.

The account can be opened with a minimum deposit of £25 and withdrawals are permitted, subject to serving an 180-day notice period.

Notice accounts act as a middle ground between easy access and fixed rates, enabling people to withdraw money whenever they need to, but they have to give the bank an agreed amount of notice beforehand or they could face penalties.

Savers must be UK residents aged 16 and over and interest is paid annually on March 31.

Up to £500,000 can be held in the account overall and like with any ISA, up to £25,000 can be invested per tax year, tax-free.

Transfers in are permitted either in the branch or by post. Transfers out will be subject to a penalty charge of 180 days’ interest unless 180 days’ notice is provided.

But while the new account offers an appealing deal, it isn’t currently topping the table for Notice Cash ISAs.

West Brom Building Society is currently leading the market with an Annual Equivalent Rate (AER) of 5.1 percent on its WeBSave 60-Day Notice ISA (Issue Two).

Savers aged 16 and over need just £1 to launch the account and interest is paid yearly. Withdrawals are permitted if 60 days’ interest is provided. If people need to access their cash earlier than that, a charge equivalent to 60 days’ interest will be applied.

Furness Building Society falls just behind with its 90-Day Notice Cash ISA (Issue One), offering an AER of 5.01 percent.

A slightly larger deposit of £1,000 is required to launch the account, and savers must be aged 18 and over. Interest is paid yearly and at least 90 days’ notice must be given to withdraw any funds. Earlier withdrawals will be subject to a 90-day loss of interest.

Millions of Britons are potentially missing out on hundreds of pounds extra income a year because their Cash ISA savings are in low-paying accounts, analysis from Yorkshire Building Society and CACI suggests.

According to the mutual’s research, nearly five million instant access cash ISA accounts are currently earning 1.5 percent interest or less in the UK with an average balance of over £8,500.

Chris Irwin, director of savings at Yorkshire Building Society, said: “It’s surprising to see such a large amount sitting in low-paying ISA accounts after a period of significant increases to savings interest in the last two years. This data follows on from our analysis earlier in the year calling for consumers to take time to review their finances.

“The start of a new financial year gives the perfect opportunity to review finances and make the switch from low-paying accounts. Although we’ve seen the Bank rate increase this analysis clearly shows that there are still many accounts which continue to pay low rates despite those increases.”

He added: “It’s important savers take action and think about how they can make their hard-earned cash go as far as possible.”


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