Moneybox hikes table topping cash ISA to 4.75%

Savings and investing app MoneyBox has hiked the rate on its cash ISA to 4.75% within a week of launching, continuing to top the best-buy table for cash ISAs right now. We have all the details.

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The Moneybox cash ISA rate mentioned in this article is no longer the top one for cash ISAs. See our best cash ISAs guide for the latest top rates.

Cash ISAs have historically 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 it looks like competition is starting to return to the ISA market. If you're looking for the best cash ISA, Moneybox’s 4.75% rate is currently the best available, as it has hiked the rate from an already table-topping 4.65% to 4.75% within a week since its launch. 

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Cynergy Bank’s ISA  has also boosted its ISA rate from 4.55% to 4.7%. 

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. 

Who can open Moneybox’s cash ISA?

If you have at least £500 to deposit, then you are able to open the MoneyBox cash ISA via its app. If you have less, then Cynergy Bank's cash ISA paying 4.7% 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 maximised 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 in 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 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,” says Kalpana Fitzpatrick,MoneWeek’s senior digital editor and author of Invest Now

But, are cash ISAs worth it compared to other savings products on the market?  

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.

Swipe to scroll horizontally
Your tax rateIncomeAmount of interest on savings that’s tax free
No tax£0 to £12,570You can earn a maximum of £5,000 in interest from savings tax-free
Basic rate taxpayer or low income£12,571 to £17,570Can earn up to £5,000 in interest tax-free
Basic rate taxpayer£17,571 to £37,700Earn £1,000 interest on savings without having to pay tax with the Personal Savings Allowance.
Higher rate taxpayer£37,701 to £125,140Can earn up to £500 worth of interest tax-free with the Personal Savings Allowance.
Additional rate taxpayerOver £125,141No 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, a stocks and share ISA may be better for your long term goals,” adds Fitzpatrick. 

Vaishali Varu
Staff Writer

Vaishali has a background in personal finance and a passion for helping people manage their finances. As a staff writer for MoneyWeek, Vaishali covers the latest news, trends and insights on property, savings and ISAs.

She also has bylines for the U.S. personal finance site and Ideal Home, GoodTo, inews, The Week and the Leicester Mercury

Before joining MoneyWeek, Vaishali worked in marketing and copywriting for small businesses. Away from her desk, Vaishali likes to travel, socialise and cook homely favourites