160 Cash ISAs have gained little interest from savers due to their poor rates, and even while interest rates have gone up, the cash ISA market has been slow to keep up when compared to other savings products. But if you’re looking for the best cash ISA, Moneybox’s 4.65% rate is currently the best available, beating the 4.55% on offer via Cynergy Bank. But is the Moneybox cash ISA worth it and how does it compare to other savings products? We look at the details of MoneyBox’s new offering, which it claims has already attracted millions of pounds in deposits. Charlie Mortimer, co-founder of Moneybox, said: “In the 72 hours since we launched our Cash ISA to current customers, I am delighted to say that the product has been extremely well received, with many thousands of Cash ISAs opened and millions in funds deposited. Who can open Moneybox’s cash ISA? If you have at least £500 to deposit, then you can open the MoneyBox cash ISA via its app. If you have less, then Cynergy Bank’s cash ISA paying 4.55% lets you start with £1. And since it is an ISA, you cannot have it if you already have another cash ISA that you are paying into this tax year (2023/24) or you have already maximized your £20,000 annual ISA limit. How does Moneybox’s cash ISA work? As well as the minimum deposit of £500, the cash ISA rate includes a 0.85% AER bonus rate for 12 months. It is also important to note that if the balance in the account drops below £500, so will the interest rate to a measly 0.75%. The ISA allows you to make three withdrawals a year without paying any penalties on interest and you can also transfer other ISAs in. On your fourth withdrawal, the rate drops to 0.75% AER. You can also transfer money from another ISA. “You may have a cash ISA from years ago paying very little interest, so you may want to look to transfer it to a better paying one – whether that is MoneyBox or another provider – taking advantage of better rated while shielding your savings from the tax man makes sense depending on how much you are saving,” Are cash ISAs worth it? When you save and earn interest, you will have to pay tax on interest. But with an ISA, you do not have to pay tax on up to £20,000 in savings. If you are likely to hit the tax threshold then it could be worth shielding it. Here’s when you pay tax and how much Your tax rate Income Amount of interest on savings that’s tax free No tax £0 to £12,570 You can earn a maximum of £5,000 in interest from savings tax-free Basic rate taxpayer or low income 1 to £17,570 Can earn up to £5,000 in interest tax-free Basic rate taxpayer £17,571 to £37,700 Earn £1,000 interest on savings without having to pay tax with the Personal Savings Allowance. Higher rate taxpayer £37,701 to £125,140 Can earn up to £500 worth of interest tax-free with the Personal Savings Allowance. Additional rate taxpayer Over £125,141 No savings interest allowance. “It’s also worth noting that the rate does not beat inflation, so you are still losing money in real terms. Unless you think you may need that money in the short-term, stocks and share ISA may be better for your long-term goals,” adds Fitzpatrick. You Might Be Interested In Foreign Investors Mandated to Open Bank Accounts in Laos Citi Successfully Concludes Sale of Indonesia Consumer Business to UOB Surprising Contraction: Japan’s Economy Shrinks More Than Anticipated in Q3 Dollar Nears Parity with Euro Bank of England maintains rates and resists expected cuts 5 Best Fintech Stocks to Buy Now
