Cost of living: Why Bank of England has increased interest rates
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Paragon Bank has recently increased the interest rate it offers on its issue 10 Triple Acess ISA. The ISA offers savers unlimited deposits through a nominated account and withdrawals can be made at any time. It also allows up to three withdrawals throughout the year without affecting the interest rate on the anniversary of the account.
The monthly interest rate is only slightly lower at 1.64 percent.
If more than three withdrawals are made, then the rate drops significantly to 0.75 percent.
The interest rate on this account, however, is “variable” and if it increases Paragon Bank states that it will “let you know as soon as possible, this can be after the new rate is effective”.
If the bank reduces the interest rate it states that it will notify the account holder 14 days ahead of the change.
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The ISA can be opened with a minimum deposit of £1 and it accepts transfers in from other ISAs.
The maximum that can be held in the account is £500,000, plus any resulting interest made.
It also allows transfers out of the account to other ISAs.
Paragon Bank states that if a person deposits £1,000 and makes no withdrawals throughout the year, then they will make £16.50 worth of interest.
The account has to be opened and is entirely managed online.
People have to be over the age of 18 years to be able to open an account and they must also be a UK resident for tax purposes.
Once the application process has been approved, people will need to make their first deposit within 28 days of the approval.
However, Paragon Bank has said: “If you’re transferring an ISA from another provider and it takes longer than 28 days, it will still be processed and your ISA will stay open.”
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If they fail to do this, then the account will automatically close and they will have to repeat the application process.
This ISA also has the benefit of flexible ISA status, which allows money to be withdrawn and replaced in the same tax year without it counting any further towards the annual ISA allowance.
The annual ISA allowance for 2022-23 is £20,000.
MoneySavingExpert.com described the account as “the perfect home for your tax-free savings” is people wanted “convenient access” to their cash.
The ISA also features on the Moneyfacts.co.uk top 10 list of easy access cash ISAs.
Rachel Springall, finance expert, at Moneyfacts said: “Savers looking to utilise their ISA allowance will be pleased to see an improvement to the top interest rates on offer in this sector, especially those who want a bit of flexibility with their cash.
“Paragon Bank pay’s an enticing 1.65 percent, which is one of the most attractive interest rates for a cash ISA, sitting not far behind the top rate of 1.75 percent from Virgin Money, which is available to new and existing current account customers, and Gatehouse Bank who pay an expected profit rate of 1.75%.
“Savers who choose Paragon Bank must ensure they are aware of the terms of withdrawals, as it permits three a year without penalty. The Triple Access ISA is also a Flexible ISA, and savers can access Paragon’s ISA Wallet, where they have the freedom to spread their yearly ISA allowance across multiple ISAs in their range.
“As interest rates continue to rise, it’s wise for savers to keep a close eye on the top rate tables to take advantage of the latest deals to surface.”
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