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Investment platform Hargreaves Lansdown is offering £100 cashback to customers who open a new cash Isa.
The Limited Access Cash Isa* account pays 3 per cent interest and is available via Hargreaves Lansdown’s Active Savings platform. The money is held by Coventry Building Society.
The account allows up to six withdrawals a year without a charge, and savers will need to deposit at least £10,000 to be eligible for the £100 bonus.
Savings boost: The Limited Access Cash Isa pays 3% interest. Taking the £100 bonus into account, that rate would effectively be boosted to 4% for those depositing £10,000
Adding the cash bonus to the interest payments means someone depositing £10,000 into the account would effectively secure a 4 per cent rate.
They would earn £400 in interest over one year – if the rate remained the same.
Those looking to make the most of their Isa allowance this year have until 6 April to get everything they can into the tax-free shelter for savings and investments.
Hargreaves Lansdown’s £100 offer is available for those who already hold an investment account or Active Savings account with the investment platform.
However, anyone who sets up an investing account or savings account immediately before applying for the cash Isa deal can still benefit from the £100 offer.
Once set up, new customers will then need to open the Limited Cash Isa deal by 3 May and deposit £10,000 to get the £100 bonus.
However, anyone looking to transfer their cash Isa from another provider needs to be aware that the offer is only eligible to those using their 2022/23 or 2023/24 allowance.
And savers can’t just add £10,000 and then withdraw once the £100 comes in. They will need to retain the minimum balance of £10,000 for an entire year.
Emma Wall, head of savings at Hargreaves Lansdown said: ‘We are thrilled to be launching a loyalty offer for our clients, boosting the already competitive 3 per cent Limited Access Isa rate from our key partner bank Coventry Building Society.
‘This highly competitive Isa rate comes at a time when savers need their cash to work harder than ever, as inflation continues to bite – with an added bonus.
‘The Limited Access Isa is a great way to retain flexibility over your savings – with the benefit of a higher interest rate over Easy Access, but with the ability to withdraw funds should the proverbial rainy-day strike.’
Should you use a cash Isa?
Isas are attractive for taxpayers because all interest and capital gains are tax-free. Find out what Isa account may be best for you here.
The £20,000 tax-free Isa allowance doesn’t roll over to the next tax year, so it’s always important to maximise contributions every year for those able to do so.
Savings rates have been rising in recent years, which means that more are now being dragged into the savings tax net.
Whether it makes sense for savers may depend on their tax bracket and how much interest they already earn from savings held in non-Isa savings accounts.
The tax protector: You can think of an Isa as a shield that protects your savings or investments from being subject to taxation
This is because most savers get a personal savings allowance meaning they can earn up to a certain amount of interest tax-free in normal savings accounts.
The allowance is £1,000 for basic rate taxpayers and £500 for higher rate taxpayers. Additional rate taxpayers have no allowance.
Someone looking for a home for their rainy day fund in a non-Isa savings account won’t currently do much better than 3 per cent, unless they resort to fixed rate savings and surrender access to their cash.
The Rainy Day Account from Yorkshire BS pays 3.35 per cent, but this is only paid on the first £5,000 and withdrawals can be made on just two days in each year.
>> Check out the best ‘non-isa’ easy-access savings rates
Best accounts at a glance
There are none that beat inflation this month, however, make sure you shop around for the best returns possible.
Easy-access: Yorkshire BS – 3.35%
One-year fixed-rate: Al Rayan Bank – 4.31%
Two-year fixed-rate: Al Rayan Bank – 4.47%
Three-year fixed rate: Al Rayan Bank – 4.57%
Easy-access cash Isa: Cynergy Bank – 3%
Should you sign up to Hargreaves Lansdown’s deal?
Although the Hargreaves Lansdown deal is a limited access account, the fact that savers are able to make six withdrawals per year without a penalty is fairly generous.
Many limited access deals only allow for two or three withdrawals per year.
Coventry Building Society is also advertising a 2.41 per cent easy-access deal* on Hargreaves Lansdown’s savings platform, however, this is not eligible for the £100 bonus.
Compared to the wider market, the 3 per cent limited access account stacks up really nicely.
The best easy-access cash Isa deals are currently offered by Swansea Building Society and Bath paying 3.25 per cent and 3.19 per cent respectively. However, customers will need to live in either Wales or Bath to benefit.
Aside from that, Shawbrook Bank is also offering an easy-access deal paying 3.01 per cent, while Cynergy Bank and Harpenden Building Society are equal to the Hargreaves Lansdown limited access deal – both paying 3 per cent.
Cynergy and Shawbrook’s account allows for unlimited easy-access, while Harpenden’s deal restricts savers to three withdrawals per year.
However, there is no £100 bonus on offer meaning, anyone able to commit £10,000 would still be better off opting for Hargreaves Lansdown.
THIS IS MONEY’S FIVE OF THE BEST CASH ISA DEALS
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