Today Trading 212 have unveiled the best Cash ISA on the market. Not only does this ISA offer the best interest rate on your tax free savings but it’s a flexible ISA meaning you can withdraw and deposit funds back in the ISA without impacting your yearly allowance!
Best Cash ISA
A Cash ISA is a simple and effective ways of saving with your gains protected from tax. We’ve previously discussed the types of ISA available, with cash ISAs being the easiest to work with.
Trading 212 have offered the same 5.2% interest rate for uninvested cash in their stocks and shares ISA. We looked at what this means in practice in our blog when Trading 212 announced the cash ISA was coming.
The new cash ISA means you can take advantage of this rate without having to opt into Money Market Funds and hence you receive full FSCS protection.
Best Cash ISA
| Trading 212 | Cynergy Bank | Kent Reliance | Charter Savings Bank | |
|---|---|---|---|---|
| Interest Rate | 5.2% | 4.82% | 4.86% | 4.97% |
| Flexible | Yes | No | No | No |
Best Easy Access Cash ISAs
As with all variable easy access cash ISAs the interest rate is variable, so if the Bank of England cut the base rate as is widely expected to happen in the next few months, the 5.2% rate will drop.
Interest from Trading 212 is paid daily and you can open from a little as £1.
Flexible Cash ISA
Not only is the interest rate on Trading 212’s new ISA market leading, but the ISA is flexible.
If you want to withdraw funds and then deposit back within the same tax year you can now do so! This means you don’t have to worry about losing your ISA allowance in cash of an emergency. The flexibility will be a big relief for many who maybe are not able to plan so far ahead.
This also makes this cash ISA a great place to store an emergency fund. We’ve talked about how premium bonds can be used for this purpose, however this ISA has a gaurnateed rate of return higher than expected premium bonds winnings.
Changes to Stocks and Shares ISA
Trading 212 have also announced that their Stocks and Shares ISA is now flexible as well. This follows the same rules as your Flexible Cash ISA which allows you to move money between the two without a slightly cumbersome ISA transfer process.
To transfer from a stocks and shares ISA, you’ll need to sell your investments first. This may incur foreign exchange fees.
Personal Reflections
I already have a stocks and shares ISA with Trading 212 and have not filled up my allowance for this tax year. My savings are split between a stocks and shares ISA, a cash ISA and emergency fund in premium bonds.
I have a cash ISA with another provider, sadly locked away for another year and at a lower rate! Had I been able to access those funds, I would be performing an ISA transfer into the Trading 212 Cash ISA today. Hopefully the ISA will still be available next year!
Being able to flexibly transfer funds is a huge bonus; one that usually comes at the cost of a good interest rate, however there are no compromises here.
This is the best cash ISA on the market. If I don’t manage to maximise my ISA allowance this year, I will start transferring my emergency fund from premium bonds into the Trading 212 Cash ISA.
