- Savings app’s Isa is now flexible, so money can be withdrawn and replaced
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The saving and budgeting app Plum* has made its cash Isa flexible, meaning you can withdraw and replace money in the same tax year without reducing your allowance.
A flexible Isa lets you withdraw your money and put it back again without affecting your annual allowance – provided you pay it back in the same tax year.
With a non-flexible Isa, the money withdrawn would still count towards your annual £20,000 allowance.
This update follows the provider scrapping punishments for withdrawals at the end of last year, after This is Money consistently said that they brought the account down.
The changes mean that the account is now properly flexible, making it a very competitive option if you’re considering how to make the most of your Isa allowance before tax-year end.
Plum is currently offering a strong 4.66 per cent variable rate, which includes a fixed 2.12 per cent boost for 12 months for new customers.
It’s a good alternative to Trading 212*, which currently has a slightly higher rate of 4.68 per cent for new customers (including a 1.28 per cent boost for 12 months).
Rashmi V D’Souza, vice president of product at Plum, called it an ‘exciting new adjustment’ that ‘reflects our commitment to make our proposition as attractive as possible.’
> Find out more and open an account with Plum*
Plum is a savings app that helps you budget and build a pot
How does Plum’s cash Isa stack up?
Plum’s 4.66 per cent rate of interest means it’s among the top providers in our rate table, only beaten by Prosper* at 4.7 per cent and Trading 212* at 4.68 per cent.
Each of these accounts includes a fixed 12-month bonus rate for new customers on top of the regular underlying rate – and they’re all flexible Isas.
Of the three providers, Plum* offers a relatively low underlying rate of 2.54 per cent variable, which is what it reverts to after 12 months.
By comparison, Prosper offers an underlying rate of 2.78 per cent variable, while Trading 212 offers a regular 3.6 per cent variable.
If you want to transfer an Isa to Plum, keep in mind you’ll receive a lower 4.07 per cent variable, which includes a fixed 12-month boost of 1.53 per cent.
Trading 212 also lowers its rate for transfers by only applying the boosted element to contributions made in the same tax year. For example, if you transferred an account you’ve been building over the last 12 months now, it would only earn the boost until 5 April. After this, those funds would automatically earn an underlying rate of 3.6 per cent, while new contributions would still receive the boost.
Meanwhile, Prosper doesn’t currently offer transfers at all.
You can open Plum’s cash Isa by downloading Plum’s app and funding it with a minimum deposit of £1. There’s no way to manage your account other than using the app, so keep this in mind if you’d prefer to look after your money in a different way.
Plum pays the bonus interest at the end of the 12 months, so you won’t get it if you close or transfer your account before then.
What about accounts with no boost?
If you don’t want the hassle of dealing with a boosted rate, you could consider the Hargreaves Lansdown easy-access cash Isa*, which is currently offering 4.26 per cent interest variable. This account is provided in partnership with Vida Savings.
Otherwise, you might want to think about locking your money away for the certainty of a fixed interest rate.
Vida Savings is offering a 1-year fixed-rate Isa at 4.37 per cent and accepts transfers.
HSBC is paying a huge 4.5 per cent on its 1-year fixed-rate Isa, but you must be an existing current account holder.
For a 2-year fix, have a look at Furness BS paying 4.45 per cent interest. This rate is also offered by Close Brothers.
SAVE MONEY, MAKE MONEY
4.68% cash Isa
4.68% cash Isa
Trading 212: 1.08% fixed 12-month bonus
£100 cashback
£100 cashback
Transfer or fund at least £10,000 with Prosper
6% cash Isa
6% cash Isa
Includes 2% boost for three months
£3,000 cashback
£3,000 cashback
1% cashback up to £3,000 when transferring
Earn up to £3,000
Earn up to £3,000
£100-£3,000 cashback for joining
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