As the Bank of England Base Rate rises, high street banks and building societies have been increasing rates across their own accounts and offerings. Teachers Building Society has now launched a new cash ISA paying a more competitive rate to savers.
Teachers Building Society was founded in 1966 to help teachers onto the property ladder. It provides mortgage and savings products to teachers and other education professionals across England and Wales.
With over 11,000 members, it also offers holiday-let and buy-to-let mortgages and a range of savings accounts to other professionals.
Following the increased demand it has seen for its short-term fixed rate savings products in recent weeks, the building society has today announced the launch of its new 12-month Fixed Rate Cash ISA (Issue 62) paying an Annual Equivalent Rate (AER) or 3.6 percent.
Fixed term ISAs are a type of savings account that offers a fixed rate of interest for a set length of time.
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This means the bank or building society cannot change the interest rate during the specified term length, which could work well for account holders hoping to save long-term.
Cash ISAs are also often a popular route people take to save, as these accounts allow up to £20,000 to be deposited per year, without having to pay tax on the interest above the Personal Savings Allowance (PSA).
The Teachers Building Society account can be opened with a minimum deposit of £1,000 and interest is calculated daily and applied to the balance on December 12, 2022, and December 12, 2023.
Withdrawals cannot be made during the fixed rate period and early closure will be subject to a 90-day penalty interest charge.
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Both internal and external ISA transfers in are allowed but the account is not flexible, meaning doing this will have an impact on the person’s annual allowance.
The ISA is open to savers of any profession who are looking to secure a fixed rate alongside the benefits of tax-free saving.
Speaking on the account launch, David Leek, commercial director at Teachers Building Society, said: “Our new fixed rate cash ISA provides a rate of interest amongst the best currently available for savers looking for a secure, tax-free home for their money.
“With rates rising, more savers could breach the Personal Savings Allowance (PSA) for the first time, making fixed rate cash ISAs especially attractive to those who have built up savings and could now face paying tax on the interest earned.
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“The Teachers Building Society 12-month fixed ISA pays a competitive rate of 3.6 percent in its sector and permits transfers in from Cash ISAs and Stocks and Shares ISAs. Savers will need £1,000 to open the account, but should they wish to access it earlier than expected, they can do so subject to closure and a 90-day penalty interest charge.”
However, Ms Springall continued: “It is worth pointing out that there are higher interest rates available on one-year fixed rate ISAs. Buckinghamshire Building Society and Nottingham Building Society pay a market-leading 3.85 percent and may be attractive to savers who have less than £1,000 to invest.”
“These are encouraging signs for savers who wish to utilise their ISA allowance, especially those with larger pots who may be edging closer to their Personal Savings Allowance (PSA) limit due to rising interest rates. However, there is still a rate gap between fixed ISAs and fixed bonds, so savers will need to weigh up any tax-free allowance they have before they commit.”
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