Competition heats up in Isa market with new deal offering 4.55% interest

Competition to attract savers’ Isa cash is heating up, with a building society launching a new rate described by a savings expert as market leading.

Skipton Building Society has launched the 18-month fixed-rate cash Isa at 4.55% AER (annual equivalent rate).

The society said the account is available to both new and existing customers and can be opened online, using the Skipton app, in branch or by phone.

The minimum balance in the account is £500, with a maximum of £1 million.

Customers can deposit up to their annual Isa allowance of £20,000 and transfer in Isa savings from previous tax years if they wish.

Savers need to bear in mind that withdrawals are not permitted during the term and early closure is subject to a 90 days’ interest penalty.

Alex Sitaras, head of savings and partnership products at Skipton Building Society, said: “With Isa allowances under increased scrutiny and savers keen to act before any future changes, many people are looking for straightforward ways to secure strong, tax‑free returns.

“That’s why we’re pleased to introduce a new 18‑month fixed Isa, offering one of the leading rates on the market today and available to both new and existing customers.”

From April 6 2027, changes will mean that, while the total annual Isa allowance will still be £20,000, adults aged under 65 will be able to put away only up to £12,000 in a cash Isa, with the remaining £8,000 allowance potentially going into stocks and shares.

Savers aged 65 and over will retain the annual £20,000 subscription limit for a cash Isa.

Rachel Springall, a finance expert at Moneyfactscompare.co.uk, said Skipton’s deal was market leading for a short-term Isa of this type.

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She said: “Building societies work incredibly hard to provide decent savings rates to their members, so it’s fantastic to see Skipton Building Society offer a market-leading fixed-rate Isa, paying 4.55% after 18 months.”

Ms Springall said cash Isas were “sought after due to their tax-free wrapper”.