Skipton launches new top rate 4.5% ISA

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Skipton Building Society launched an impressive 4.5% fixed-rate cash ISA yesterday to replace its market-leading account withdrawn on Monday.

The bond is available on a 'first come first served basis', after the overwhelming popularity of the 5% fixed-rate ISA it launched at the beginning of March and had to withdraw recently due to high customer demand.

This new ISA is fixed for five years – so your money will be locked away for this time – but it currently offers one of the best ISA rates on the market.

Read our round-up of the best cash ISA rates

The next best rates come from Nationwide and Halifax that both offer similar deals of 4.4% on four-year fixed-rate ISAs.

The ISA account is available online, in-branch or by telephone, and it allows transfers in from other cash ISAs.

The minimum investment is £500; after this you can top it up to the new annual ISA allowance (£5,340 in 2010/11). But as this is a limited issue, as soon as it's withdrawn you won't be able to make any more deposits.

You'll be penalised if you access your money early, so balance withdrawals and early closure of the account are both subject to loss of 240 days' interest.

Kris Brewster, Skipton's head of products, says: "We're delighted to have come back to market straight away with this replacement product which remains very competitive. We expect this account to prove very popular and we hope it will help to raise further awareness among consumers of the value of having a tax-free savings account as part of a balanced portfolio."

This account works well if you want to tuck your savings out of reach and need the security of knowing you're getting a good interest rate. However, if you want earlier, or for immediate access stick to an instant-access ISA, even if the rates are lower.


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