Teachers Building Society has boosted the interest rate on its Double Access Cash ISA to 4.50% tax-free AER, making it among the highest-paying ISAs on the market.
Open to all savers, the ISA allows two withdrawals per year without penalty and requires just a £100 minimum deposit. A parallel Double Access Savings account, also open to everyone, now offers the same 4.50% gross AER, under the same withdrawal conditions. The rate hike comes as part of broader increases across four of the Society’s savings products.
For those in the education sector, Teachers Building Society is also offering slightly higher rates of 4.55% AER on both its teacher-exclusive Double Access Cash ISA and Savings account.
The Society warns that exceeding two withdrawals per year will reduce the rate to 1.25%.
Based on the average UK Cash ISA balance of £13,400, a saver could earn over £600 in interest in 12 months if they avoid additional withdrawals.
David Leek, commercial director at Teachers Building Society, said: “The new rates on our double access cash ISA accounts provide interest rates amongst the best on the market for savers looking for a secure, tax-free home for their money.”
He added that savers could also transfer in previous ISA balances and take advantage of the current £20,000 annual allowance.
Founded in 1966, Teachers Building Society uses savings to fund low-deposit mortgages for teachers, helping more educators get onto the property ladder – a mission that remains central to the mutual’s identity.
Mr Leek said: “Those who choose Teachers Building Society can benefit from knowing that by saving with us, they are choosing an organisation whose values are rooted in social purpose. We use savings to fund mortgages, which means those who save with us are directly helping more teachers buy their first home.”
Using a Cash Individual Savings Account (ISA), people living in the UK can currently save up to £20,000 a year without paying tax on the interest earned.
These accounts have become particularly popular during the recent period of high interest rates, as thousands of savers have been hit with tax bills on their pots. In a standard savings account, Britons can only earn so much interest before having to pay tax on it.
Easy access Cash ISAs provide savers with these tax-free benefits, and terms typically mean there are few to no withdrawal restrictions. This makes these accounts beneficial for those needing to dip into their pots.
What else is out there?
While Teachers Building Society’s Cash ISA takes a spot on Moneyfactscompare’s best buy table, it isn’t quite topping the chart yet.
Investment app Moneybox tops the list with an Annual Equivalent Rate (AER) of 5.46%, and savers can launch the account with a minimum deposit of £500.
Moneybox’s offer includes a 1.51% bonus rate for the first three months, after which the rate will drop. Up to three withdrawals are permitted per 12-month period, and interest is paid on the anniversary.
Plum’s Cash ISA offers an AER of 4.85% on deposits of £100 or more. This rate includes a 1.54% bonus for the first 12 months, and interest is also paid monthly. However, Plum imposes a lower interest rate if you make more than three withdrawals in a calendar year.
Chip places also offers a competitive interest rate with an AER of 4.82%. The deal includes a bonus rate of 1.72% for 12 months, and savers can launch the account with just £1. Interest is paid monthly, and withdrawals are not restricted.
