Hargreaves Lansdown has become the first cash savings platform to offer fixed term cash ISA which will give savers 4.8% tax free for a one year fixed rate.
The ISA will be available via its Active Savings platform, which lets savers manage their money from one account. The ISA is provided by Coventry Building Society, one of its 20 partner banks for cash savings.
The fixed term cash ISA will sit alongside existing easy access and limited access options, allowing you to spread your ISA allowance across multiple products.
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Mark Hicks, head of Active Savings, Hargreaves Lansdown, said: “Taking advantage of cash ISAs is becoming increasingly important for clients as interest rates have risen and as more savers start earning more than the tax-free allowance (£1,000).
“By providing the full suite of cash ISA products (fixed term, easy access and limited access), clients can now have more flexibility when managing their cash ISAs alongside their existing savings portfolio, whilst also having the flexibility to choose from multiple deposit types.”
How does Hargreaves Lansdown’s fixed rate cash ISA work?
While you can nab a fixed rate cash ISA elsewhere, Hargreaves Lansdown says it is the only platform which allows savers to spread their ISA across different types of ISAs in one place.
So, you can put some of your ISA in an easy access pot and some in a fixed rate cash ISA if you like.
The fixed term cash ISA is provided by Coventry Building Society over a one-year term and offers clients a rate of 4.8%.
The ISA forms part of its Active Savings offering, which lets you move your money around from one place to make the most of the top rates.
However, it is worth noting that the platform does not cover the whole of the market - meaning you can only take advantage of rates available from its partner banks, which currently total 20.
The most recent bank to join Hargreaves Lansdown’s Active Savings is Sainsbury’s Bank, but the platform said it will continue to focus on expanding the ISA proposition by rolling out additional products from its existing bank partners in the first half of 2024.
How does the cash ISA compare to the rest of the market?
If you are simply looking for the top rate, then you can beat this 4.8%. Currently, the best fixed cash ISA rate is via Zopa, which offers 5.41% one year fixed.
The best easy access cash ISA rate also pay a competitive rate of 5.09% - though it is limited to three withdrawals a year. Zopa’s easy access ISA offers 5.08%.
But, you will not have the same flexibility to mix and match in the same way as you would if you held the Active Savings Account.
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