Savings Account: ‘Very Attractive’ Option as Bank Raises Interest Rates – ‘Competitive’ | Personal finance | Finance
The rate was raised for the third time this year, with Paragon Bank saying the move was made to improve its “competitive characteristics” and to support ISA savers. With this ISA, savers can make up to three withdrawals in a 12 month period without affecting their interest rate. The fourth withdrawal will reduce the interest rate to 0.25%.
Paragon added that the new pricing will be available to existing and new Triple Access ISA customers starting today.
The provider said the rate increase added to its “competitive ISA range and features” available because it is “mindful” to issue to support savers.
Derek Sprawling, Director of Savings at Paragon Bank, said: “We view ISAs as an important part of a savings portfolio, which is conveniently created through our ISA Wrapper and features in our Flexible ISA.
“It is important at Paragon that we provide our clients with a valuable return on their savings and that we continue to support the ISA cash segment, an important tool for proactive savers.”
READ MORE: Rishi Sunak’s cost of living support ‘will have next to no effect on those struggling’
Paragon said the estimated account balance, based on depositing £1,000 over 12 months with no withdrawals, would be £1,012.
The balance of an account with four withdrawals would be £964.71.
Rachel Springall, financial expert at Moneyfactssaid it was a “great” decision to see an increase in activity in the ISA market.
She added that Paragon has made a “significant improvement” to its triple ISA access.
DO NOT MISS
The bank had relaunched its Triple Access Account ISA in February 2022 where it offered a “competitive rate” of 0.65% variable AER.
In April, they increased it again with a rate of 0.80%.
However, Ms Springall said the new rate has now secured a “market-leading position” in the floating rate ISA industry.
She added: “As the name suggests, savers should be comfortable with the terms of the account as the deal will pay 1.20% as long as savers make no more than three withdrawals within a period of 12 months.
“Savers can invest from as little as £1 and also transfer from cash ISAs or equity and stock ISAs.”
Ms. Springall explained that a useful feature is that savers can spread their ISA savings over multiple ISAs in Paragon’s range.
This can be useful for those hoping to split their ISA pot, for example, hoping to get a higher rate in a fixed ISA product.
The offer is available as long as Britons meet their ISA allowance.
Paragon also said its flexibility feature is another benefit as it allows any funds withdrawn from an access ISA to be added back into the ISA in the same tax year without the allocation of the l year is affected.
Ms Springall concluded: “Overall this is a very attractive offer and is likely to appeal to savers who may need to dip into their savings in an emergency.
“Alternatively, if savers need more flexibility, they would be wise to compare alternative ISAs that do not impose a withdrawal limit.”
To open this flexible ISA, savers need a single pound to start earning interest and must do so online.
Currently, Paragon offers rates between 1.35% and 1.75% for its one-year to five-year fixed rate ISAs.
The Bank of England announced in May that its interest rates had hit one per cent, the highest the UK had seen in 13 years as it battled rising inflation.
Rising rates should benefit savers, but will hurt mortgage borrowers and businesses, which face higher borrowing costs.
The next announcement will be on June 16, 2022, with many expecting a further rise as the UK battles 9% inflation.