Savings interest rates are continuing to be raised by banks with Paragon Bank making changes to line of ISA products.
The bank has increased interest rates across its line of fixed rate cash ISAs, now offering up to 5.05 per cent.
The move by Paragon Bank comes just before the 2023/24 tax year ends on April 5 which means savers have only a couple of weeks to take advantage of the £20,000 ISA allowance.
All of the bank’s ISAs are eligible through the financial institution’s ISA Wallet feature which allows savers to spread their annual allowance across multiple cash ISAs.
According to research conducted by Paragon Bank, a large proportion of ISA savers leave it late to use their full allowance.
Around three in 10 savers typically making a lump sum payment into their account towards the end of the tax year.
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Savings interest rates are still on the rise with some banks
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The new savings interest rates across Paragon Bank’s line of fixed rate ISA products include the following accounts:
- One-year fixed rate cash ISA increasing from 4.65 per cent to 5.05 per cent AER
- Two-year fixed rate cash ISA increasing from 4.20 per cent to 4.59 per cent AER
- Five-year fixed rate cash ISA increasing from 3.75 per cent to four per cent AER.
These new rates will be available from tomorrow, March 15, and accounts can be opened and managed online, over the phone or by post.
Savers need to a minimum balance of £500 to open an account, up to a maximum of £500,000 plus any resulting interest.
Some 58 per cent of savers attempt to meet their full ISA allowance each year, according to Paragon Bank’s survey of 2,000 Britons.
Furthermore, around 41 per cent have paid tax on their savings in the last year which incentivises many to attempt to use their full ISA allowance.
Derek Sprawling, Paragon Bank’s savings director, shared that many banks will experience a “busy few weeks” as the tax year comes to an end.
He said: “Last year was one of the busiest ISA seasons on record, with much of that money directed towards one-year variants.
“As those rates mature, we want to offer savers competitive options for their ISA cash.
“A large cohort of ISA savers also typically leave it late in the tax year to utilise their £20,000 allowance, so we expect a busy few weeks before the tax year ends.”
LATEST DEVELOPMENTS:
The Bank of England base rate is at a 15-year high of 5.25 per cent GB NEWSBased on Paragon's analysis of CACI data, £10.7 billion and £13.4 billion were placed in new adult cash ISA accounts in March and April last year, respectively.
The vast majority of these cash deposits were placed into one-year ISA accounts.
New business levels for ISAs March 2023 were 256 per cent higher in 2023 than the previous year, with April being 154 per cent higher.
Savings despots for Paragon Bank jumped by 24.3 per cent in its last financial year to £13.3billion, the bank reports.