Beehive Money launches Cash ISA and earns ‘excellent’ rating | Personal Finance | Finance
Beehive Money has launched a new Cash ISA with a 4.66 percent interest rate, earning an “excellent” Moneyfactscompare rating.
The interest rate is fixed for one year and takes a “prominent” position in the market in its sector.
Commenting on the deal, Caitlyn Eastell, a spokesperson at Moneyfactscompare.co.uk, said: “Beehive Money has launched a new one-year fixed rate cash ISA. It takes a prominent position in the market for its term paying 4.66 percent until October 14, 2025.
“Savers will only need to deposit a minimum of £500 and they may be pleased to see that further additions can be paid in for 14 days from the account opening.
“It would be wise for investors to carefully consider earlier access on transfers out as they are subject to 90 days’ loss of interest penalty. Overall, the deal earns an Excellent Moneyfacts product rating.”
Beehive Money is a trading name of the Nottingham Building Society and savers must be aged 18 and over to launch an account.
While Beehive Money may be offering a competitive deal, the account isn’t quite taking the top spot in the one-year fixed Cash ISA sector.
Virgin Money tops the board with an Annual Equivalent Rate (AER) of 5.05 percent. There is no minimum deposit required to get started, interest is applied on maturity, and early access will be subject to 60 days’ loss of interest.
Punjab National Bank (International) Limited falls just behind with its Fixed Rate Cash ISA offering an AER of 4.8 percent.
Savers need a minimum deposit of £1,000 to open the account and interest is paid on maturity. Earlier access is permitted on closure only, subject to 30-day notice, and no interest will be paid.
Kent Reliance is offering the next competitive rate with its Cash ISA One Year Fixed Rate (Issue 102). The account offers a 4.75 percent AER and savers need a minimum deposit of £1,000 and interest is paid on maturity. Earlier access is subject to a 90-day loss of interest.
Despite falls to fixed bond rates, Cash ISA equivalents showed signs of resilience month-on-month.
According to Moneyfactscompare’s research, the average one-year fixed ISA rate rose to 4.46 percent and the average longer-term fixed ISA rate remained at 4.08 percent. The difference in rate between the average one-year and longer-term fixed bond stands at 0.38 percent.
Rachel Springall, finance expert at Moneyfacts, said: “Savers will no doubt be concerned over falling interest rates due to the 0.25 percent cut to the Bank of England base rate, but our savings trends that were observed prior to the cut revealed an interesting split in how providers were re-adjusting their market positions with rate tweaks prior to the announcement.
“One area of the savings market to show resilience between the start of July and the start of August was Cash ISAs, with both the average one- and longer-term fixed rates refusing to move in the same direction as their fixed rate bond counterparts.
“A similar story can be seen from both the average easy access and notice Cash ISA rates, where these both rose month-on-month.”
Ms Springall noted that Cash ISAs are “ideal” for savers concerned about breaching their Personal Savings Allowance (PSA). She explained: “As an example, a higher rate taxpayer would breach their £500 interest earned allowance if they had £20,000 invested for a year that earned them more than 2.5 percent.”
She continued: “It will be interesting to see how both the average rates and overall product availability will be impacted by the base rate cut in the coming months. This would be a great opportunity for savers to review their accounts and switch if they feel they are not being rewarded for their loyalty.”
