Mar 27, 2025

Multiple banks are offering a further one per cent interest on top of their usual returns for a short time to entice customers Cash ISAs are a popular product with many banks offering high returns (Photo: Peter Dazeley/Getty Images) email linkbookmark Savers are being offered more short-term bonuses on cash ISAs than previously, as banks look to entice customers with high rates that later drop down. Providers including Moneybox, Plum and Zopa are all offering a further 1 per cent interest rate or more on top of their usual rates for three months on their cash ISA products. Customers will have a boosted rate for a short time before it then falls to its original offering. It means that the deals appear in comparison tables as the best on the market, but after customers have opened the account and seen the bonus expire, they are likely to be making less than they could elsewhere. It comes at a time when savings rates are dropping as interest rates fall. Although the base rate is still high at 4.5 per cent, it has been reduced three times in the last few months with savings rates following suit. Experts say now is the time to lock in a good rate as, if interest rates fall further as expected, more savings rates will too. The Government confirmed in the Spring Statement document that they will be looking into reforms to encourage more people to invest. As such, there has been a rush to maximise the yearly allowance. Read Next Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said: “Cash ISAs remain an essential part of a savings portfolio and will no doubt gain popularity from the millions of taxpayers moving up from basic rate to higher rate tax, which will effectively halve their Personal Savings Allowance (PSA).” The PSA is the total amount of interest you can earn each year across all of your bank accounts (except ISAs) without paying tax. Ms Springall said: “Even if someone just opens and invests a £1 in a cash ISA before 6 April, it means they can top it up when they like, and not miss out on having an ISA for the 2024/25 tax-year. “There is still time to navigate the top rates in the market and providers have been working hard to entice new deposits, but savers have to check the terms and conditions of any account to ensure it’s the right choice for them. “Many of the top deals are also via a mobile app, which might not suit everyone, but these will be handy for those who prefer to bank on-the-go or set up automatic alerts and deposits.” Although good news for savers looking to up their returns, they must also be aware of when the deal comes to an end. Ms Springall added: “Savers need to watch out for upfront bonuses as some of the best cash ISAs on the market have a very short period of just three months on when the bonus applies. “Easy access cash ISAs pay variable rates of interest, so these can change at any point, which is why a fixed bonus on the outset can be seen as a positive aspect, as it’s guaranteed not to change. Savers cannot afford to neglect checking their rate on a regular basis, as they can switch easy access cash ISAs whenever they want if it no longer offers a competitive return.” Using comparison sites and regularly checking the best rates is recommended for those looking to maximise the most of their money. The best rates with short term boosts Moneybox currently has the best rate on the market at 5.32 per cent, inclusive of a 1.12 per cent bonus for three months. Chip also offers a rate of 5.26 per cent inclusive of a 0.9 per cent bonus, also for three months. Plum offers a rate of 5.04 per cent on its cash ISA – inclusive of a 1.48 per cent boost for 12 months before falling. Zopa has a rate of 5.01 per cent inclusive of a 1.16 per cent bonus for three months. Best savings rates For those who may not be looking for an ISA, there are still a range of savings accounts available. The best easy access rate is with Atom Bank which is offering an interest rate of 4.75 per cent. Meanwhile, the best one-year fixed rate is with Birmingham Bank with a rate of 4.67 per cent and the best two-year is with Gatehouse Bank with a rate of 4.65 per cent. email