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Money app Plum has scrapped withdrawal restrictions on its easy-access cash Isa, This is Money can reveal.
Plum’s cash Isa* currently pays 4.37 per cent and now allows unlimited withdrawals, with no rate penalty.
The savings provider previously allowed cash Isa customers to make just three withdrawals in 12 months before the rate would drop to 3.04 per cent.
Plum customers will now be able to access their money as often as they like without being punished with a lower rate. They also will no longer be penalised with a lower rate if their Isa balance drops below £100.
The move from Plum comes after This is Money highlighted that savers need the flexibility to make multiple withdrawals whenever they need when it comes to using an easy access cash Isa to beat savings tax.
>Five best Isas: See This is Money’s pick of the top cash Isas
Plum has scrapped its three withdrawal limit for all customers with customes now allowed to withdraw their money as many times as they like
How does Plum’s cash Isa stack up?
It’s good news for savers looking for a true easy-access Isa who had been put off by the withdrawal restrictions, as Plum currently offers one of the best cash Isa rates on the market at 4.37 per cent.
This rate includes a bonus rate of 1.33 per cent for 12 months, the rate reverts to 12 months once the 12 months has elapsed.
All new customers will be able to get the full 12-month bonus rate on balances from just £1, regardless of how many withdrawals they make, as long as they don’t transfer their funds to another provider within the 12 months after opening the Plum Isa.
Customers who transfer an existing Isa from another Isa to Plum’s Isa will still get a lower rate of 3.04 per cent.
Plum’s vice president of product, Rashmi V D’Souza, says: ‘Now more than ever, savers want more flexibility when it comes to balancing liquidity and returns, and we’re determined to meet that need.
‘We hope this development will help our customers to access their money when they need it and boost interaction with the Plum app.’
Plum’s cash Isa can be opened by downloading Plum’s app and funded with a minimum deposit of £1. It is not a flexible Isa.
What do rival cash Isas pay?
Plum’s cash Isa is beaten only by Trading 212’s cash Isa* which is offering 4.51 per cent, including a 0.66 per cent bonus for 12 months. After the bonus period the rate will revert to 3.85 per cent. This is a flexible cash Isa, allowing money to be taken out and paid back in during the same tax year, without affecting the annual Isa allowance. Savers can get this rate on transfers but only on this year’s Isa contributions transferred in – not previous years’ money.
Savers looking to lock their savings away while savings rates remain high can get 4.27 per cent from Tembo if they fix their savings for a year. After a year, a saver putting £5,000 in this Isa would have £5,217.73.
Meanwhile Cynergy Bank is offering 4.1 per cent to savers who fix for two years. At the end of the term, a saver who kept £5,000 in this Isa would have £5,426.52.
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