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Fixed rate cash ISA rates war hots up

Written by: Emma Lunn
Paragon Bank and Aldermore Bank have upped the interest rates they pay on their cash ISAs.

Both savings providers are targeting the top-of-the-market position for one-year fixed rate cash ISAs, by upping the interest rate they pay on one-year savings to 0.8%.

This puts them at the top of the best buys for this category. But they’re not alone – OakNorth Bank and Shawbrook Bank also pay the same 0.8% rate on their respective one-year fixed cash ISA products.

Derek Sprawling, savings director at Paragon Bank, said: “Our ISAs are designed with flexibility in mind. Our ISA Wallet feature gives savers the opportunity to split their ISA allowance across different ISA accounts. On top of this, we also offer a ‘flexibility’ feature on our easy access ISAs that allow customers to replace funds withdrawn from an ISA without their allowance being impacted.”

Ewan Edwards, director of savings at Aldermore, said: “As we approach the end of summer, many people may already be thinking about where they would like to go on holiday next year. For savers looking to fund a big trip in the future, or for those perhaps planning a wedding or big item purchase, fixed rate cash ISAs provide a guaranteed interest rate over a set length of time.”

Aldermore has also increased the rate on its two-year fixed rate cash ISA from 0.9% to 1%. However, this rate is beaten by OakNorth Bank which pays 1.02% and Paragon Bank which pays 1.01%.

Other savings providers which have increased their rates in the past week include UBL UK, Shawbrook Bank, Furness Building Society, Leeds Building Society and United Trust Bank.

UBL UK now tops the three-year fixed rate ISA chart paying 1.21% gross on anniversary on its three-year fixed rate cash ISA, as well as a higher gross rate of 1.22% on maturity and a lower gross rate of 1.20% quarterly or monthly. United Trust pays slightly less on its three-year cash ISA at 1.2%.

UBL UK also offers the highest rate in the five-year fixed rate cash ISA market, paying 1.46%, while United Trust pays 1.45%.

The highest cash ISA rate on offer is from United Trust – but to get the 1.5% rate you’ll need to tie your money up for seven years.

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