Clydesdale and Yorkshire Banks are launching two new fixed-rate cash Isas on Monday 1 March – both of which come with competitive interest rates.
The two new accounts offer a choice of one and five year terms, and come with rates of 3% AER and 5% AER respectively.
Both accounts require initial deposits of at least £2,000 and allow customers to transfer in their Isa savings from previous tax years. Additional deposits (up to the full Isa allowance) are allowed from April 5 throughout the lifetime of these accounts.
However, no withdrawals from Clydesdale and Yorkshire’s fixed-rate cash Isas can be made unless they are closed. Early closure is possible provided five days notice is given, but savers will stand to pay an interest penalty of at least £30.
Best cash Isa rates
The banks’ one year fixed-rate cash Isa compares favourably with the other deals listed on the Which? Best Rate tables. It offers a rate of 3% AER for the remainder of this tax year and also for the tax year 2010/11.
While Aldermore’s one year fixed-rate Isa beats the Clydesdale and Yorkshire deal by 0.5%, it requires a higher initial deposit of at least £3,600 and does not allow additional deposits during the tax year.
You can compare more one year fixed-rate Isa deals by checking out the Which? Best Rate Cash Isas review.
Longer term fixed-rate savings
Clydesdale and Yorkshire’s five year fixed-rate cash Isa, which pays 5%, also represents a good deal for anyone looking to lock their money away over a longer period of time.
However, it is important to think carefully before investing in a long-term fixed-rate account as you won’t have penalty-free access to your money until the deal reaches maturity.
In addition, it’s important to be aware that interest rates may fluctuate in either direction during the term of any fixed-rate savings account – so if interest rates rise while your cash is invested in one, you may end up feeling out of pocket.
To read more about cash Isas, check out the Which? advice guide. Our Cash Isas review also features a smart search tool which will find a great Isa deal for you based on your personal specifications.
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