Banks and building societies are launching a wave of new ISA products as the current financial year comes to a close, with savers rushing to use their tax-free allowance.
Smart money app Plum has increased interest rates on its cash ISA products, effective from today, to a "market-leading" level ahead of the April 5 deadline.
The provider's new deposit rate now stands at 4.60 per cent AER (variable), positioning it as the highest easy-access rate offered directly by an ISA provider for savers with as little as £1 to invest.
Plum has simultaneously raised its transfer-in rate to 4.45 per cent AER (variable), which now leads the market for customers moving existing ISA funds.
Plum is boosting the savings rate attached to its cash ISA
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This transfer rate applies to deposits from both the current and previous tax years, giving savers flexibility when consolidating their tax-free savings.
Beyond competitive interest rates, the Plum cash ISA offers several additional benefits for savers. The account operates as a flexible ISA, allowing customers to withdraw money and return it within the same tax year without using up any of their annual £20,000 allowance.
Accessibility remains a priority, with the minimum balance set at just £1. The app also includes automated saving features designed to help users build their ISA balance more easily over time.
Victor Trokoudes, CEO and founder of Plum, said: "We want to offer the best rates we can to customers, and we're delighted to increase our rates ahead of tax-year end on Sunday.
Plum is a popular money saving app
|PLUM
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ISA products remain central to UK household savings strategies | GETTYBoth our new deposit and transfer-in rates are now top rates, well above the Bank of England base rate."
He encouraged savers to examine the complete product offering when choosing a cash ISA, warning that withdrawal restrictions and high minimum deposits can undermine the benefits of marginally higher rates elsewhere.
"At Plum, we've worked hard to remove those types of restrictions as part of our ongoing commitment to continuously improve our offerings so our customers can get the best experience possible," Mr Trokoudes added.
During her first Budget, Chancellor Rachel Reeves unveiled reforms to cash ISAs with the tax-free allowance set to be reduced from £20,000 to £12,000.
Rachel Reeves is preparing significant reform to ISA reform | GETTY Notably, the £20,000 tax-free threshold will remain in place for stocks and shares ISAs for the foreseeable as the Chancellor seeks to encourage Britons to invest.
As a result, the following financial year will be the last opportunity for cash ISA savers to utiilise this full allowance before it is reduced.
Derence Lee, chief finance officer at Shepherds Friendly, shared: "As the cash ISA limit drops from 2027/28, reviewing your allocations now and taking the time to understand stocks and shares ISAs can help you make full use of your ISA allowance and plan the right mix of cash and investments ahead of the changes coming into effect next year. ”
“Taking action sooner rather than later can help ensure you make full use of your ISA allowance, benefit from potential tax-free growth and get your long-term financial goals on track. However, investments should be considered in the context of your overall financial situation and risk tolerance."