TSB launches new 18-month Cash Isa - here's how it compares
26th March 2019 15:57
by Stephen Little from interactive investor
TSB has boosted its Isa range just in time for the end of the tax year with the launch of a new 18-month fixed rate Cash Isa.
For the first time TSB is offering an 18-month fixed rate Isa with 1.6% interest. The bank has also brought back a three-year fixed rate Isa offering 1.85% interest.
The accounts can be opened in-branch or online with a minimum initial deposit of £3,000.
Transfers for the current and previous years’ Isa savings are accepted. On maturity, your fixed-rate Isa will mature into a Cash Isa Saver without bonus, which currently pays a variable interest rate of 0.3% tax-free.
However, you will be penalised if you decide to take out your money before the maturation date.
For the 18-month account this is the equivalent to 135 days interest on the amount taken out or transferred. On the three-year account it is equivalent to 270 days interest.
- The Isa - your flexible friend
Paul Izon, head of savings at TSB, says: “It’s clear that ISA’s are making a comeback particularly as so many believe an ISA is the best option for them. It’s also encouraging to see that lots of people want to save more this year than last year.
“Our new and improved rates are some of the best in the market and are a great way for customers to save and get a healthy return on their savings for whatever they have planned in the future. At TSB, we believe every customer should consider having an ISA account, so that they are making the most of their tax-free allowances.”
TSB's Isas
| Isa Product | Details |
|---|---|
| 18-month fixed rate Isa | 1.6% tax free/AER variable |
| Entirely new product to TSB | |
| Minimum opening balance of £3,000 | |
| 2-year fixed rate Isa | 1.70% tax free/AER variable |
| Minimum opening balance of £3,000 | |
| 3-year fixed rate Isa | 1.85% tax free/AER variable |
| Minimum opening balance of £3,000 | |
| Junior Cash Isa | 3.25% tax free/ AER variable |
| For children under the age of 18 | |
| Cash Isa | 0.60% AER variable for first 12 months. 0.30% AER thereafter |
| Minimum deposit £1,000 |
How they compare
If you are prepared to wait six months longer you could beat the rate by over 0.3%.
OakNorth is offering a rate of 1.94% for its two-year fixed rate Cash Isa. You can open this account online with a minimum initial investment of £1,000.
Shawbrook Bank is offering a two-year fixed rate cash Isa at 1.91%, which can be opened online for £1,000.
Just below this, Santander and Kent Reliance have two-year fixed rate cash Isas at 1.90%.
The Santander rate is only available to 123 World and Select customers whereas the other products are open to all.
You can get an even better rate if you lock your money away in a long-term fixed rate Isa.
Currently, the best rate out there is from Shawbrook Bank at 2.3%.
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This is a five- year fixed-term deal that ends the account can be managed online with a minimum deposit of £1,000.
The next best rate is from Coventry Building Society at 2.15% and is a fixed-term deal that ends on 31 May 2024 and the account can be managed online or in-branch.
This article was originally published in our sister magazine Moneywise, which ceased publication in August 2020.
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